Question

Mahaley, Inc., manufactures and sells two products: Product Q9 and Product F0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

	Expected Production	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product Q9	810	8.1	6,561
Product F0	810	6.1	4,941
Total direct labor-hours			11,502

The direct labor rate is $21.90 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product Q9	$175.00
Product F0	$146.80

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated		Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost		Product Q9	Product F0	Total
Labor-related	DLHs	$	380,680	6,561	4,941	11,502
Machine setups	setups		44,330	350	250	600
Order size	MHs		285,200	3,200	3,000	6,200
		$	710,210

The unit product cost of Product F0 under activity-based costing is closest to:

Answer 1