Mellencamp, Inc

Multiple Choice

Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $24.20 per DLH. The direct materials cost per unit is $146.60 for Product A3 and $256.20 for Product Y6. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The unit product cost of Product Y6 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:

A) $863.50 per unit
B) $1,091.70 per unit
C) $939.40 per unit
D) $1,151.80 per unit