costing

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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O
$580,843
$1,071,491
$462,030
$1,513,560
Transcribed Image Text:O $580,843 $1,071,491 $462,030 $1,513,560
Snavely, Incorporated, manufactures and sells two products: Product E1 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:
Product E1
Product A7
Total direct labor-hours
Product E1
Product A7
The direct labor rate is $22.70 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials
Cost per Unit
$286.00
$ 223.00
Activity Cost Pools
Labor-related
Machine setups
Order size
Expected
Production
600
500
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Direct Labor- Total Direct
Hours Per Unit Labor-Hours
6,000
10.0
5.0
2,500
8,500
Activity
Measures
DLHs
setups
MHS
Estimated
Expected Activity
Overhead Cost Product E1 Product A7
$ 121,100
57, 110
893,250
$ 1,071,460
6,000
700
3,000
2,500
500
2,800
Total
8,500
1,200
5,800
The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
Transcribed Image Text:Snavely, Incorporated, manufactures and sells two products: Product E1 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: Product E1 Product A7 Total direct labor-hours Product E1 Product A7 The direct labor rate is $22.70 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $286.00 $ 223.00 Activity Cost Pools Labor-related Machine setups Order size Expected Production 600 500 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Direct Labor- Total Direct Hours Per Unit Labor-Hours 6,000 10.0 5.0 2,500 8,500 Activity Measures DLHs setups MHS Estimated Expected Activity Overhead Cost Product E1 Product A7 $ 121,100 57, 110 893,250 $ 1,071,460 6,000 700 3,000 2,500 500 2,800 Total 8,500 1,200 5,800 The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
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