6. Schoeninger, Inc., manufactures and sells two products: Product X1 and Produc
ID: 2485176 • Letter: 6
Question
6. Schoeninger, Inc., manufactures and sells two products: Product X1 and Product I6. The company has 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 X1
Product I6
Total
Labor-related
DLHs
$293,231
700
9,000
9,700
Machine setups
setups
74,767
600
500
1,100
General factory
MHs
268,830
4,300
4,400
8,700
$636,828
The activity rate for the General Factory activity cost pool under activity-based costing is closest to:
$30.90 per MH
$32.58 per MH
$65.65 per MH
$32.66 per MH
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product X1
Product I6
Total
Labor-related
DLHs
$293,231
700
9,000
9,700
Machine setups
setups
74,767
600
500
1,100
General factory
MHs
268,830
4,300
4,400
8,700
$636,828
Explanation / Answer
General Factory Cost= $ 268,830
No Of Machine hr(MHs)= Machine hrs of Product X1+ Machine hrs of Product I6
=4,300+4,400=8,700 hrs
Activity rate for the General Factory= General Factory Cost/ No Of Machine hr(MHs)
= $ 268,830/8,700 = $ 30.9
Answer: $30.90 per MH
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