Question

Salvatori, Inc., manufactures and sells two products: Product A4 and Product Q5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Direct Total Labor Direct Expected Hours Per Labor- Production Unit Hours 570 6.7 3,819 870 3.7 3,219 7,038 Product A4 Product Q5 Total direct labor-hours The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Cost Pools Labor-related Machine setups Order size Estimated Activity Overhead Measures Cost DLHS $161,558 setups 9,050 MHS 498,027 $668,635 Product A4 Product 05 3,819 3,219 650 550 3,900 4,200 Total 7,038 1,200 8,100 The overhead applied to each unit of Product A4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

$

Activity Cost Pools	Estimated Overhead Costs(a)	Total Expected Activity(b)	Activity rate (a/b)
Labor-related	161558	7038	22.95
Machine Setups	9050	1200	7.54
Order size	498027	8100	61.48

Overhead Costs of Product A4

Activity Cost Pools	Activity - A4	Activity rate	Amount
Labor-related	3819	22.95	87646.05
Machine Setups	650	7.54	4901
Order size	3900	61.48	239772
			332319.05

Overhead Cost per Unit = $332319.05/570 units =$583

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