Question

Gelinas, Inc., manufactures and sells two products Product S5 and Product L3. Expected production of Product S5 is 500 units and of Product L3 is 700 units. The company has an activity based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Activity Coat Pools Labor-related Production orders Order size Activity Measures DLHS orders MHS Estimated Overhead Cost $286,741 40,384 463,730 $790, 855 Product S5 3,500 300 4.000 Product L3 5,600 500 3,900 Total 9,100 800 7.900 The overhead applied to each unit of Product L3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer: Overhead applied to each unit of Product L3 under ABC is closest to $ 615.18

	Overhead costs assigned to Product L3
Labor related ( $ 286,741 / 9,100) * 5,600	$ 176,456
Production orders ( $ 40,384 / 800) * 500	25,240
Order size ( $463,730 / 7,900 ) * 3,900	228,930
Total overhead cost assigned to Product L3	430,626
Expected production	700 units
Overhead cost per unit	$ 615.18