Question

32) Snavely, Inc., manufactures and sells two products: Product El and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Direct Labor- Total Direct Production Hours Per Unit Labor-Hours Product E1 800 Product A7 300 600 Total direct labor-hours 4,600 4,000 2.0 The direct labor rate is $18.40 per DLH. The direct materials cost per unit for each product is given below: Product E1 Product A7 Direct Materials Cost per Unit $127.10 $299.80 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Labor-related DLHs Machine setups setups Order size MHs Estimated Expected Activity Overhead Cost Product El Product A7 Total $ 100,096 4.000 600 4,600 47,208 300 400 700 738,368 4,100 4,200 8,300 S 885,672 The total overhead applied to Product A7 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) A) $373,632 B) $115,524 C) $241,548 D) $413,664

Answer 1

Correct Answer will be : D) $413664

Detail Working for your easy Refrence

Computation of Activity Rate & Allocation fof Overhead
					Product E1		Product A7
ABC system	Estimated cost (a)	Driver	Activity pool (b)	Activity Rate (c=a/b)	No. of Activity (d)	Allocated OH (cXd)	No. of Activity ( e)	Allocated OH (c X e)
Labour Related	$100,096.00	No. of DLH	4,600	$21.76	4000	$87,040.00	600	$13,056.00
Machine Setup	$47,208.00	No. of Setup	700	$67.44	300	$20,232.00	400	$26,976.00
Order Size	$738,368.00	NO. of MH	8,300	$88.96	4100	$364,736.00	4200	$373,632.00
	$885,672.00					$472,008.00		$413,664.00

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