Scholes Manufacturing Corporation Has a Traditional Costing System in Which

Multiple Choice

Scholes Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs) . The company has two products, L45Y and F91I, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $3,170,400 and the company's estimated total direct labor-hours for the year is 60,000.

The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:

-The unit product cost of product L45Y under the company's traditional costing system is closest to:

A) $54.20
B) $73.27
C) $64.25
D) $31.00