Question 1

Stoughton 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,M31P and M07T,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $2,675,460 and the company's estimated total direct labor-hours for the year is 51,000.
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:
Required:
a.Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system.
b.Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system.
 $\begin{array}{c}
\begin{array}{lll}
\
\text {Direct materials per unit......... }\
\text {Direct labor per unit...............}\
\text { Direct labor-hours per unit....}\
\text { Annual production................}
\end{array}
\begin{array}{lll}
\mathrm{M31P} & \mathrm{M07T} \
\$ 27.50 & \$ 64.90 \
\$ 7.80 & \$ 23.40 \
0.60 & 1.80 \
40,000 & 15,000
\end{array}
\end{array}$
 $\begin{array}{lc}
  \text {  Activities and Activity Measures} &\text { Estimated Overhead Cost }\
 \text { Supporting direct labor (DLHs). } &\$1,326,000\
 \text {Setting up machines (setups)  } &456,960\
 \text { Parts administration (part types) } &\underline{892,500}\
 \text { Total. } &\underline{\$2,675,460}\
\end{array}$
 $$\begin{array} { l r r r } 
& \text { M31P } & \text { M07T } & \text { Total } \
\text { Supporting direct labor ...... } & 24,000 & 27,000 & 51,000 \
\text { Setting up machines .......... } & 2,346 & 510 & 2,856 \
\text { Parts administration ......... } & 1,122 & 663 & 1,785
\end{array}$$

Accepted Answer

a.Traditional Manufacturing Overhead Costs
Predetermined overhead rate = $2,675,460 $\div$  51,000 DLHs = $52.46 per DLH
b.ABC Manufacturing Overhead Costs
Overhead cost for M31P
Overhead cost for M07T
 $\begin{array}{c}
\begin{array}{lll}
\
\text {Direct labor-hours...................................}\
\text {Predetermined overhead rate per DLH...}\
\text {Manufacturing overhead cost per unit....}
\end{array}
\begin{array}{lll}
\mathrm{M31P} & \mathrm{M} 07 \mathrm{~T} \
0.60 & 1.80 \
\$ 52.46 & \$ 52.46 \
\$ 31.48 & \$ 94.43
\end{array}
\end{array}$
 $$\begin{array} { l r r r } 
& \begin{array} { c } 
\text { Estimated } \
\text { Overhead }
\end{array} & \text { Total Expected } & \
& \text { Cost } & \text { Activity } & \text { Activity Rate } \
\text { Supporting direct labor.......... } & \$ 1,326,000 & \mathbf { 5 1 , 0 0 0 } \text { DLHs } & \$ 26 \text { per DLH } \
\text { Setting up machines ............. } & \$ 456,960 & \mathbf { 2 , 8 5 6 } \text { setups } & \$ 160 \text { per setup } \
\text { Parts administration ............. } & \$ 892,500 & \mathbf { 1 , 7 8 5 } \text { part types } & \$ 500 \text { per part type }
\end{array}$$ $\begin{array}{lrrr}
&\text { Activity Rate } & \text { Activity } &\text { ABC Cost }\
\text { Supporting direct labor ...... } & \$ 26\text { per DLH } &24,000 \text { DLHs } & \$624,000 \
\text { Setting up machines........... } & \$ 160 \text { per setup } &2,346\text { setups } &375,360 \
\text { Parts administration.......... } & \$ 500 \text { per part type } & 1,122 \text { part types } & \underline{561,600}\
\text{Total.................................}&&&\underline{\underline{\$1,560,360}}\
\text { Annual production .................................. } &&& 40,000 \
\text { Manufacturing overhead cost per unit ...... } &&& \$ 39.01
\end{array}$ $\begin{array}{lrrr}
&\text { Activity Rate } & \text { Activity } &\text { ABC Cost }\
\text { Supporting direct labor ...... } & \$ 26\text { per DLH } &27,000 \text { DLHs } & \$702,000 \
\text { Setting up machines........... } & \$ 160 \text { per setup } &510\text { setups } &81,600 \
\text { Parts administration.......... } & \$ 500 \text { per part type } &663 \text { part types } & \underline{331,500}\
\text{Total.................................}&&&\underline{\underline{\$1,115,100}}\
\text { Annual production .................................. } &&& 15,000 \
\text { Manufacturing overhead cost per unit ...... } &&& \$74.34
\end{array}$

Question 2

The predetermined overhead rate (i.e. ,activity rate)for Activity 2 under the activity-based costing system is closest to:

Accepted Answer

A)  $9.15
B)  $51.99
C)  $86.93
D)  $10.23 A

Question 3

Latting 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,T73C and R28K,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000.
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:
 $$\begin{array} { l r r } 
& { \text { T73C } } & { \text { R28K } } \
\text { Direct materials per unit ......... } & \$ 14.10 & \$ 43.40 \
\text { Direct labor per unit.............. } & \$ 3.20 & \$ 25.60 \
\text { Direct labor-hours per unit...... } & 0.20 & 1.60 \
\text { Annual production.................. } & 30,000 & 15,000
\end{array}$$ $\begin{array}{lc}
\text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \
\text { Assembling products (DLHs)................ } & \$ 720,000 \
\text { Preparing batches (batches)................. } & 362,700 \
\text { Product support (product variations) ...... } & \underline{444,000} \
\text { Total........................................................ } &\underline{ \$ 1,526,700}
\end{array}$
  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$
$\begin{array}{lrrr}
&\text { T73C } & \text { R28K } & \text { Total }\
\text { DLHs.......................... } & 6,000 & 24,000 & 30,000 \
\text { Batches.................. } & 1,380 & 1,410 & 2,790 \
\text { Product variations ...... } & \mathbf{5 7 0} & \mathbf{5 4 0} & 1,110
\end{array}$
-The manufacturing overhead that would be applied to a unit of product T73C under the company's traditional costing system is closest to:

Accepted Answer

A)  $18.38
B)  $28.56
C)  $10.18
D)  $4.80  C

Question 4

The predetermined overhead rate under the traditional costing system is closest to:

Accepted Answer

A)  $9.15
B)  $43.48
C)  $84.43
D)  $19.08

Question 5

Solum 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,V47Q and K41P,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $2,449,440 and the company's estimated total direct labor-hours for the year is 54,000.
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:
 $\begin{array}{lrr}
&\text { V47Q }&\text { K41P }\
\text { Direct materials per unit .......... } & \$ 27.50& \$62.10 \
\text { Direct labor per unit.............. } & \$ 15.60 & \$ 52.00 \
\text { Direct labor-hours per unit...... } & 0.60 & 2.00 \
\text { Annual production................... } & 40,000 & 15,000
\end{array}$

$\begin{array}{lc}
\text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \
\text { Assembling products (DLHs). ................ } & \$918,000 \
\text { Preparing batches (batches)................. } & 397,440\
\text {Product support (product variations) .......... } & \underline{1,134,000} \
\text { Total........................................................ } &\underline{ \$ 2,449,440}
\end{array}$

$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$
$\begin{array}{lrrr}
&\text { V47Q } & \text { K41P } & \text { Total }\
\text { DLHs.......................... } & 24,000 & 30,000 & 54,000 \
\text { Batches.................. } & 1,458 & 1,026 & 2,484 \
\text { Product variations ...... } &2,592& 1,188 & 3,780
\end{array}$

-The unit product cost of product K41P under the activity-based costing system is closest to:

Accepted Answer

A)  $204.82
B)  $68.70
C)  $182.80
D)  $114.10

Question 6

The overhead cost per unit of Product B under the traditional costing system is closest to:

Accepted Answer

A)  $50.66
B)  $5.49
C)  $26.09
D)  $11.45

Question 7

Latting 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,T73C and R28K,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000.
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:
 $$\begin{array} { l r r } 
& { \text { T73C } } & { \text { R28K } } \
\text { Direct materials per unit ......... } & \$ 14.10 & \$ 43.40 \
\text { Direct labor per unit.............. } & \$ 3.20 & \$ 25.60 \
\text { Direct labor-hours per unit...... } & 0.20 & 1.60 \
\text { Annual production.................. } & 30,000 & 15,000
\end{array}$$ $\begin{array}{lc}
\text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \
\text { Assembling products (DLHs)................ } & \$ 720,000 \
\text { Preparing batches (batches)................. } & 362,700 \
\text { Product support (product variations) ...... } & \underline{444,000} \
\text { Total........................................................ } &\underline{ \$ 1,526,700}
\end{array}$
  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$
$\begin{array}{lrrr}
&\text { T73C } & \text { R28K } & \text { Total }\
\text { DLHs.......................... } & 6,000 & 24,000 & 30,000 \
\text { Batches.................. } & 1,380 & 1,410 & 2,790 \
\text { Product variations ...... } & \mathbf{5 7 0} & \mathbf{5 4 0} & 1,110
\end{array}$
-The manufacturing overhead that would be applied to a unit of product R28K under the activity-based costing system is closest to:

Accepted Answer

A)  $81.42
B)  $65.02
C)  $146.44
D)  $12.22

Question 8

Shininger 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,G27U and W21K,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000.
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:
 $\begin{array} { l r r } 
& \text { G27U } & \text { W21K } \
\text { Direct materials per unit .......... } & \$ 24.50 & \$ 59.30 \
\text { Direct labor per unit.............. } & \$ 5.00 & \$ 25.00 \
\text { Direct labor-hours per unit...... } & 0.20 & 1.00 \
\text { Annual production.................. } & \mathbf { 4 5 } , \mathbf { 0 0 0 } & \mathbf { 1 5 , 0 0 0 }
\end{array}$ $\begin{array}{lc}
  \text { Activities and Activity Measures } & \text {  Estimated Overhead Cost} \
 \text { Supporting direct labor (DLHs)......... } &\$384,000\
 \text {Setting up machines (setups).............  } &255,840\
 \text { Parts administration (part types)..... } &\underline{345,600}\
 \text {Total.................................................  } &\underline{985,400}\
\end{array}$
 $$\begin{array} { l r r r } 
&  {\quad \text { Expected Activity } } \
 & \text { G27U } & \text { W21K } & \text { Total } \
\text { DLHs............ } & 9,000 & 15,000 & 24,000 \
\text { Setups ........... } & 1,032 & 936 & 1,968 \
\text { Part types...... } & 624 & 240 & 864
\end{array}$$
-The manufacturing overhead that would be applied to a unit of product W21K under the activity-based costing system is closest to:

Accepted Answer

A)  $71.57
B)  $41.06
C)  $8.11
D)  $30.51

Question 9

Kuechle 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,I49L and B26W,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $1,793,790 and the company's estimated total direct labor-hours for the year is 57,000.
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:
 $$\begin{array} { l r r } 
& \text { I49L } & \text { B26W } \
\text { Direct materials per unit ......... } & \$ 17.80 & \$ 55.40 \
\text { Direct labor per unit.............. } & \$ 16.10 & \$ 55.20 \
\text { Direct labor-hours per unit..... } & 0.70 & 2.40 \
\text { Annual production.................. } & 30,000 & 15,000
\end{array}$$ 
Required:
a.Determine the unit product cost of each of the company's two products under the traditional costing system.
b.Determine the unit product cost of each of the company's two products under activity-based costing system.
 $\begin{array}{c}
\begin{array}{lll}
 \text {Activities and Activity Measures..........}\
 \text {Supporting direct labor (DLHs)............}\
 \text {Setting up machines (setups)................}\
 \text {Parts administration (part types).........}\
 \text {Total....................................................}
\end{array}
\begin{array}{c}
\text {Estimated Overhead Cost}\
\$ 285,000 \
437,190 \
\underline{1,071,600 }\
\underline{\underline{ \$ 1,793,790}} 
\end{array}
\end{array}$
 $$\begin{array} { c r r r } 
\text { Activities } &  { \text { I49L } } &{ \text { B26W } } & { \text { Total } } \
\text { Supporting direct labor ...... } & 21,000 & 36,000 & \mathbf { 5 7 , 0 0 0 } \
\text { Setting up machines........... } & 798 & \mathbf { 2 , 5 6 5 } & \mathbf { 3 , 3 6 3 } \
\text { Parts administration......... } & 1,539 & \mathbf { 1 , 1 4 0 } & \mathbf { 2 , 6 7 9 }
\end{array}$$

Accepted Answer

The answer of Kuechle Manufacturing Corporation has a traditional costing...

Question 10

Bustle 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,Z68W and K07E,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $1,809,600 and the company's estimated total direct labor-hours for the year is 26,000.
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:
 $\begin{array}{lrr}
&\text { Z68W }&\text { K07E }\
\text { Direct materials per unit.......... } & \$ 14.90 & \$ 44.30 \
\text { Direct labor per unit.............. } & \$ 4.20 & \$ 25.20 \
\text { Direct labor-hours per unit...... } & 0.20 & 1.20 \
\text { Annual production................. } & 40,000 & 15,000
\end{array}$ 
$\begin{array}{lc}
  \text {Activities and Activity Measures  } &\text { Estimated Overhead Cost }\
 \text { Assembling products (DLHs).................  } &\$702,000\
 \text {  Preparing batches (batches) ................. } &132,600\
 \text {Milling (MHs)........................................  } &\underline{975,000}\
 \text {  Total.................................................... } &\underline{\underline{1,809,600}}\
 \text {  } &\
\end{array}$
 $\begin{array}{c}
\begin{array}{lll}
  \text {Activities}\
  \text {Assembling products....}\
  \text {Preparing batches.........}\
  \text {Milling.........................}
\end{array}
\begin{array}{lll}
\text { Z68W}&\text { K07E }&\text {Total }\
8,000 & 18,000 & 26,000 \
884 & 442 & 1,326 \
702 & 1.248 & 1.950
\end{array}
\end{array}$
 Required:
a.Determine the unit product cost of each of the company's two products under the traditional costing system.
b.Determine the unit product cost of each of the company's two products under activity-based costing system.

Accepted Answer

The answer of Bustle Manufacturing Corporation has a traditional costing...

Question 11

Shininger 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,G27U and W21K,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000.
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:
 $\begin{array} { l r r } 
& \text { G27U } & \text { W21K } \
\text { Direct materials per unit .......... } & \$ 24.50 & \$ 59.30 \
\text { Direct labor per unit.............. } & \$ 5.00 & \$ 25.00 \
\text { Direct labor-hours per unit...... } & 0.20 & 1.00 \
\text { Annual production.................. } & \mathbf { 4 5 } , \mathbf { 0 0 0 } & \mathbf { 1 5 , 0 0 0 }
\end{array}$ $\begin{array}{lc}
  \text { Activities and Activity Measures } & \text {  Estimated Overhead Cost} \
 \text { Supporting direct labor (DLHs)......... } &\$384,000\
 \text {Setting up machines (setups).............  } &255,840\
 \text { Parts administration (part types)..... } &\underline{345,600}\
 \text {Total.................................................  } &\underline{985,400}\
\end{array}$
 $$\begin{array} { l r r r } 
&  {\quad \text { Expected Activity } } \
 & \text { G27U } & \text { W21K } & \text { Total } \
\text { DLHs............ } & 9,000 & 15,000 & 24,000 \
\text { Setups ........... } & 1,032 & 936 & 1,968 \
\text { Part types...... } & 624 & 240 & 864
\end{array}$$
-The manufacturing overhead that would be applied to a unit of product G27U under the company's traditional costing system is closest to:

Accepted Answer

A)  $8.21
B)  $3.20
C)  $11.73
D)  $19.94

Question 12

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:
 $\begin{array}{lrr}
&\text { L45Y }&\text { F91I }\
\text { Direct materials per unit .......... } & \$ 14.20 & \$ 48.30 \
\text { Direct labor per unit.............. } & \$ 16.80 & \$ 50.40 \
\text { Direct labor-hours per unit...... } & 0.80 & 2.40 \
\text { Annual production................... } & 45,000 & 10,000
\end{array}$
 $\begin{array}{lc}
\text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \
\text { Direct labor support (DLHs) ................ } & \$1,740,000 \
\text { Setting up machines (setups)................. } & 422,400\
\text { Part administration (part types) .......... } & \underline{1,008,00} \
\text { Total........................................................ } &\underline{ \$ 3,170,400}
\end{array}$

$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$
$\begin{array}{lrrr}
&\text { L45Y } & \text { F91I  } & \text { Total }\
\text { DLHs.......................... } & 36,000 & 24,000 & 60,000 \
\text { Batches.................. } & 1,140 & 1,500 & 2,640 \
\text { Product variations ...... } &900& 2,460 & 3,360
\end{array}$

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

Accepted Answer

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

Question 13

The overhead cost per unit of Product B under the activity-based costing system is closest to:

Accepted Answer

A)  $50.66
B)  $26.09
C)  $35.28
D)  $38.16

Question 14

Solum 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,V47Q and K41P,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $2,449,440 and the company's estimated total direct labor-hours for the year is 54,000.
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:
 $\begin{array}{lrr}
&\text { V47Q }&\text { K41P }\
\text { Direct materials per unit .......... } & \$ 27.50& \$62.10 \
\text { Direct labor per unit.............. } & \$ 15.60 & \$ 52.00 \
\text { Direct labor-hours per unit...... } & 0.60 & 2.00 \
\text { Annual production................... } & 40,000 & 15,000
\end{array}$

$\begin{array}{lc}
\text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \
\text { Assembling products (DLHs). ................ } & \$918,000 \
\text { Preparing batches (batches)................. } & 397,440\
\text {Product support (product variations) .......... } & \underline{1,134,000} \
\text { Total........................................................ } &\underline{ \$ 2,449,440}
\end{array}$

$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$
$\begin{array}{lrrr}
&\text { V47Q } & \text { K41P } & \text { Total }\
\text { DLHs.......................... } & 24,000 & 30,000 & 54,000 \
\text { Batches.................. } & 1,458 & 1,026 & 2,484 \
\text { Product variations ...... } &2,592& 1,188 & 3,780
\end{array}$

-The unit product cost of product V47Q under the company's traditional costing system is closest to:

Accepted Answer

A)  $53.30
B)  $70.32
C)  $43.10
D)  $78.57

Question 15

Wetz 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,Q30V and S33B,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $1,527,600 and the company's estimated total direct labor-hours for the year is 38,000.
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:
Required:
a.Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system.
b.Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system.
 $$\begin{array} { l r r } 
& \text { Q30V } & \text { S33B } \
\text { Direct materials per unit.......... } & \$ 34.10 & \$ 52.70 \
\text { Direct labor per unit .............. } & \$ 16.10 & \$ 39.10 \
\text { Direct labor-hours per unit....... } & 0.70 & 1.70 \
\text { Annual production .................. } & 30,000 & 10,000
\end{array}$$ $\begin{array}{lc}
  \text {  Activities and Activity Measures.....} &\text { Estimated Overhead Cost }\
 \text {Assembling products (DLHs)...........  } &\$608,000\
 \text {Preparing batches (batches)............  } &197,000\
 \text {  Axial milling (MHs)........................ } &\underline{722,000}\
 \text { Total.............................................. } &\underline{\$1,527,600}\
\end{array}$

$\begin{array}{c}
\begin{array}{lll}
\
\text {Assembling products.....}\
 \text { Preparing batches........}\
  \text {Axial milling.................}
\end{array}
\begin{array}{lll}
\text { Q30V } & \text { S33B } & \text { Total } \
21,000 & 17,000 & 38,000 \
456 & 1,520 & 1,976 \
570 & 874 & 1,444
\end{array}
\end{array}$

Accepted Answer

The answer of Wetz Manufacturing Corporation has a traditional costing...

Question 16

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:
 $\begin{array}{lrr}
&\text { L45Y }&\text { F91I }\
\text { Direct materials per unit .......... } & \$ 14.20 & \$ 48.30 \
\text { Direct labor per unit.............. } & \$ 16.80 & \$ 50.40 \
\text { Direct labor-hours per unit...... } & 0.80 & 2.40 \
\text { Annual production................... } & 45,000 & 10,000
\end{array}$
 $\begin{array}{lc}
\text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \
\text { Direct labor support (DLHs) ................ } & \$1,740,000 \
\text { Setting up machines (setups)................. } & 422,400\
\text { Part administration (part types) .......... } & \underline{1,008,00} \
\text { Total........................................................ } &\underline{ \$ 3,170,400}
\end{array}$

$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$
$\begin{array}{lrrr}
&\text { L45Y } & \text { F91I  } & \text { Total }\
\text { DLHs.......................... } & 36,000 & 24,000 & 60,000 \
\text { Batches.................. } & 1,140 & 1,500 & 2,640 \
\text { Product variations ...... } &900& 2,460 & 3,360
\end{array}$

-The unit product cost of product F91I under the activity-based costing system is closest to:

Accepted Answer

A)  $266.10
B)  $98.70
C)  $167.40
D)  $225.52

Exam 8: Use Activity-Based Costing Technique to Compute Product Costs for External Reports

The predetermined overhead rate (i.e. ,activity rate) for Activity 2 under the activity-based costing system is closest to:

The predetermined overhead rate under the traditional costing system is closest to:

The overhead cost per unit of Product B under the traditional costing system is closest to:

The overhead cost per unit of Product B under the activity-based costing system is closest to: