Question

43) Barkes, Inc., manufactures and sells two products: Product B0 and Product B5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Direct Labor- Hours Per Unit Total Direct Labor-Hours 2,800 2,000 4,800 Expected Production 400 7.0 4.0 Product B0 Product B5 Total direct labor-hours 500 The direct labor rate is $22.10 per DLH. The direct materials cost per unit is $288.10 for Product BO and $118.90 for Product B5 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity Product BO Product B5 Total Labor-related DLHS Production orders orders $ 136,944 2,800 2,000 4,800 64,629 588,294 $ 789,867 500 400 900 Order size MHs 3,300 3,000 6,300 The total overhead applied to Product B0 under activity-based costing is closest to: (Round y intermediate calculations to 2 decimal places.) A) $423,943 B) $460,768 C) $308,156 D) $351,052

Answer 1

Answer is A) $423,943

Activity cost pool	overhead cost	productB0
labour related	136,944	79,884 (136,944 × 2800/4800)
Production order	64,629	35,905 (64,629 x 500/900)
Order size	588,294	308,154 (588,294 × 3300/6300)
Total		423,943