Question

33) Overturf, Inc., manufactures and sells two products Product Y1 and Product Yo. 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- Expected Hours Per Total Direct Production Unit Labor-Hours Product YI 300 6.0 1,800 Product YO 500 9.0 4,500 Total direct labor-hours 6,300 The direct labor rate is $27.50 per DLH. The direct materials cost per unit is $106.10 for Product Y1 and $168.40 for Product YO. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Estimated Overhead Cost Labor-related DLHS Production orders orders Order size MHs Expected Activity Product Product Y YO Total 1,800 4,500 6,300 300 400 700 4,900 5,000 9,900 $ 151,263 43,253 863,478 S 1,057,994 The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to: A) $108.13 per DLH B) $144.18 per DLH C) $1,511.42 per DLH D) $24.01 per DLH

Answer 1

Pro NO. Dete Calculation : Activity Rate labor Related Estimated Expected overhead Cost Activity 151263 6300 $24.01 per DLH option D is correcto Estimated overhead Cost of labor related activity is $ 151263 and Estimated total fabor hours are 6300. Divide it to calculate activity rate per DLH.