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 ProductionDirect Labor-Hours Per UnitTotal Direct Labor-HoursProduct Q99209.28,464Product F09207.26,624Total direct labor-hours 15,088 The direct labor rate is $23.00 per DLH. The direct materials cost per unit for each product is given below: Direct MaterialsCost per UnitProduct Q9$176.10Product F0$147.90 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct Q9Product F0TotalLabor-relatedDLHs$391,6808,4646,62415,088Machine setupssetups 49,8309008001,700Order sizeMHs 290,7004,3004,1008,400 $732,210 The unit product cost of Product F0 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Activity based costing (ABC) refers to the method under which identifies activities in an…

Answered: Mahaley, Inc., manufactures and sells…

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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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	920	9.2	8,464
Product F0	920	7.2	6,624
Total direct labor-hours			15,088

The direct labor rate is $23.00 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product Q9	$176.10
Product F0	$147.90

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	$	391,680	8,464	6,624	15,088
Machine setups	setups		49,830	900	800	1,700
Order size	MHs		290,700	4,300	4,100	8,400
		$	732,210

The unit product cost of Product F0 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

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