Gelinas, Inc., manufactures and sells two products: Product S5 and Product L3. E

Question

Gelinas, Inc., manufactures and sells two products: Product S5 and Product L3. Expected production of Product S5 is 500 units and of Product L3 is 700 units. The company has an acivity-based costing system with the following activity cost pools, activity measures, and expected activity Estimated Activity overhead Expected Activity Activity cost Pools Measures Cost Product S5 Product 13Total Labor-related Production orders Order size DLHS orders MHS S 286, 741 3,500 300 463, 730 4, 000 S, 600 500 3,900 9,100 800 7,900 40,384 $ 790, 855 The overhead applied to each unit of Product L3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $327.04 per unit $615.18 per unit $659 05 per unit

Explanation / Answer

The correct answer is $ 615.18 per unit

Note:

Activity cost pool Cost Total Activity Activity Rate ( Cost / Total Activity) Activity For L3 Activity rate * Activity for L3 Labor Related 2,86,741 9,100 31.51 5,600.00 1,76,456 Production Orders 40,384 800 50.48 500.00 25,240 Order Size 4,63,730 7,900 58.70 3,900.00 2,28,930 7,90,855 Total Overhead Applied 4,30,626 Total Units of L3 700   Overhead Applied Per Unit of L3 ( Total Overhead Applied/ Total Units of L3) 615.18

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