Arntson, Incorporated, manufactures and sells two products: Product R3 and Product NO. The annual production and sales of Product of R3 is 800 units and of Product NO is 500 units. Dataconcerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:Product R3Product NOTotal direct labor-hoursActivity Cost PoolsLabor-relatedProduction orders.Order sizeDirectLabor-Expected Hours PerProduction800500The direct labor rate is $20.80 per DLH. The direct materials cost per unit is $276.00 for Product R3 and $280.00 for Product NO.The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:EstimatedOverheadCostActivityMeasuresDLHSordersMHSUnit4.02.0TotalDirectLabor-Hours3,2001,0004, 200$ 40,83664, 650433, 275$ 538,761Expected ActivityProduct R3 Product No1,0003,2009005002,5003,100Total4, 2001,4005,600 The unit product cost of Product R3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)Multiple Choice$608.61 per unit$332.61 per unit$691.81 per unit$967.81 per unit

The unit product cost of Product R3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $608.61 per unit $332.61 per unit $691.81 per unit $967.81 per unit

The unit product cost of Product R3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $608.61 per unit $332.61 per unit $691.81 per unit $967.81 per unit

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

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Arntson, Incorporated, manufactures and sells two products: Product R3 and Product NO. The annual production and sales of Product of R3 is 800 units and of Product NO is 500 units. Data
concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Product R3
Product NO
Total direct labor-hours
Activity Cost Pools
Labor-related
Production orders.
Order size
Direct
Labor-
Expected Hours Per
Production
800
500
The direct labor rate is $20.80 per DLH. The direct materials cost per unit is $276.00 for Product R3 and $280.00 for Product NO.
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Overhead
Cost
Activity
Measures
DLHS
orders
MHS
Unit
4.0
2.0
Total
Direct
Labor-
Hours
3,200
1,000
4, 200
$ 40,836
64, 650
433, 275
$ 538,761
Expected Activity
Product R3 Product No
1,000
3,200
900
500
2,500
3,100
Total
4, 200
1,400
5,600

The unit product cost of Product R3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
Multiple Choice
$608.61 per unit
$332.61 per unit
$691.81 per unit
$967.81 per unit

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