9. Jeanlouis, Inc., manufactures and sells two products: Product DO and Product

Question

9. Jeanlouis, Inc., manufactures and sells two products: Product DO and Product DS. 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 Labor-related Production orders orders Overhead Cost Product DO Product D5 Total 3,300 6,900 500 800 4.200 8,500 S313.743 70.264 253.555 $637562 3.600 300 4.300 DLHs General factory MHs The total overhead applied to Product DS under activity-based costing is closest to: A. $319,252 B. $125,286 C. S304,920 D. S273,240 E. S318,310

Explanation / Answer

Calculation of activity rates: Activity cost pools Estimated total cost(a) Estimated cost driver(b) activity rates((a)/(b)) Labor-related 313743 6900 DLHs 45.47 Production orders 70264 800 orders 87.83 General Factory 253555 8500 MHs 29.83 Calculation of total overhead cost of Product D5 Activity cost pools (a) activity rates(b) cost(a*b)(in$) Labor-related 3300 DLHs 45.47 150051 Production orders 500 orders 87.83 43915 General Factory 4200 MHs 29.83 125286 Total overhead cost 319252 So correct answer is A) $319252

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