Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 163E and E761, about which it has provided the following data: 163E E76I $22.20 $66.60 $17.50 Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) 0.50 84,000 The company's estimated total manufacturing overhead for the year is $3,141,600 and the company's estimated total direct labor-hours for the year is 84,000. The company is considering using a form of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations). Total Direct labor-hours Batches Product variations Multiple Choice OOOO $50.82 $37.40 630 1,260 The manufacturing overhead that would be applied to a unit of product E761 under the activity-based costing system is closest to: $112.20 $ 52.50 1.50 28,000 $33.88 Expected Activity E761 163E 42,000 42,000 1,130 2,260 Estimated Overhead Cost $2,100,000 186,000 855,600 $ 3,141,600 Total 84,000 1,760 3,520

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, 163E and E761, about which it has provided the following data:
I63E
E76I
$22.20 $66.60
$17.50 $ 52.50
Direct labor-hours per unit
0.50
84,000
Annual production (units)
1.50
28,000
The company's estimated total manufacturing overhead for the year is $3,141,600 and the company's estimated total direct labor-hours for the year is 84,000.
The company is considering using a form of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:
Direct materials per unit
Direct labor per unit
Activities and Activity Measures
Assembling products (direct labor-hours)
Preparing batches (batches)
Product support (product variations)
Total
Direct labor-hours
Batches
Product variations
Multiple Choice
O
$50.82
630
1,260
The manufacturing overhead that would be applied to a unit of product E761 under the activity-based costing system is closest to:
$37.40
$112.20
Expected Activity
$33.88
E76I
163E
42,000 42,000
1,130
2,260
Estimated
Overhead Cost
$ 2,100,000
186,000
855,600
$ 3,141,600
Total
84,000
1,760
3,520
Transcribed Image Text:Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, 163E and E761, about which it has provided the following data: I63E E76I $22.20 $66.60 $17.50 $ 52.50 Direct labor-hours per unit 0.50 84,000 Annual production (units) 1.50 28,000 The company's estimated total manufacturing overhead for the year is $3,141,600 and the company's estimated total direct labor-hours for the year is 84,000. The company is considering using a form of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Direct materials per unit Direct labor per unit Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations) Total Direct labor-hours Batches Product variations Multiple Choice O $50.82 630 1,260 The manufacturing overhead that would be applied to a unit of product E761 under the activity-based costing system is closest to: $37.40 $112.20 Expected Activity $33.88 E76I 163E 42,000 42,000 1,130 2,260 Estimated Overhead Cost $ 2,100,000 186,000 855,600 $ 3,141,600 Total 84,000 1,760 3,520
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