Mahaley, Incorporated, manufactures and sells two products: Product Q9 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:Product 09Product FeTotal direct labor-hoursProduct Q9Product FeThe direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is given below:DirectMaterialsCost perUnit$ 175.60$ 147.40Activity Cost PoolsLabor-relatedExpectedProduction870870Machine setupsOrder sizeThe company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:EstimatedOverheadCostDirectLabor-Hours PerUnit8.76.7ActivityMeasuresDLHSsetupsMHSTotalDirectLabor-Hours7,5695,82913,398$ 386,68047,330288, 200$ 722,210Expected ActivityProduct Q9 Product Fe7,5695,8296505503,8003,600Total13,3981,2007,400The unit product cost of Product FO under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Businesses utilise Activity-Based Costing (ABC) as a costing technique to assign indirect costs to…

Mahaley, Incorporated, manufactures and sells two products: Product Q9 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Direct Labor- Hours Per Unit 8.7 6.7 Product 09 Product Fe Total direct labor-hours Product Q9 Product Fe The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is given below: Direct Materials. Cost per Unit $ 175.60 $ 147.40 Activity Cost Pools Labor-related Expected Production 870 870 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Overhead Cost $ 386,680 47,330 288,200 $ 722,210 Machine setups Order size Total Direct Labor- Hours 7,569 5,829 13,398 Activity Measures DLHS setups MHS Expected Activity Product 09 Product Fe 7,569 5,829 650 550 3,800 3,600 Total 13,398 1,200 7,400 The unit product cost of Product FO under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Mahaley, Incorporated, manufactures and sells two products: Product Q9 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Direct Labor- Hours Per Unit 8.7 6.7 Product 09 Product Fe Total direct labor-hours Product Q9 Product Fe The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is given below: Direct Materials. Cost per Unit $ 175.60 $ 147.40 Activity Cost Pools Labor-related Expected Production 870 870 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Overhead Cost $ 386,680 47,330 288,200 $ 722,210 Machine setups Order size Total Direct Labor- Hours 7,569 5,829 13,398 Activity Measures DLHS setups MHS Expected Activity Product 09 Product Fe 7,569 5,829 650 550 3,800 3,600 Total 13,398 1,200 7,400 The unit product cost of Product FO under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Mahaley, Incorporated, manufactures and sells two products: Product Q9 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Product 09
Product Fe
Total direct labor-hours
Product Q9
Product Fe
The direct labor rate is $22.50 per DLH. The direct materials cost per unit for each product is given below:
Direct
Materials
Cost per
Unit
$ 175.60
$ 147.40
Activity Cost Pools
Labor-related
Expected
Production
870
870
Machine setups
Order size
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Overhead
Cost
Direct
Labor-
Hours Per
Unit
8.7
6.7
Activity
Measures
DLHS
setups
MHS
Total
Direct
Labor-
Hours
7,569
5,829
13,398
$ 386,680
47,330
288, 200
$ 722,210
Expected Activity
Product Q9 Product Fe
7,569
5,829
650
550
3,800
3,600
Total
13,398
1,200
7,400
The unit product cost of Product FO under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

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