35. Award: 0 out of 2.00 points MC Qu. 184 Mellencamp, Inc., manufactures and ..
ID: 2593805 • Letter: 3
Question
35.
Award: 0 out of 2.00 points
MC Qu. 184 Mellencamp, Inc., manufactures and ...
Mellencamp, Inc., manufactures and sells two products: Product A3 and Product Y6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Production
Direct Labor-Hours Per Unit
Total Direct Labor-Hours
Product A3
900
8.0
7,200
Product Y6
800
10.0
8,000
Total direct labor-hours
15,200
The direct labor rate is $24.20 per DLH. The direct materials cost per unit is $146.60 for Product A3 and $256.20 for Product Y6.
The company is considering adopting 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 A3
Product Y6
Total
Labor-related
DLHs
$670,624
7,200
8,000
15,200
Production orders
orders
41,545
400
300
700
General factory
MHs
281,281
3,800
3,900
7,700
$993,450
The unit product cost of Product Y6 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:
A)$1,091.70 per unit
B)$863.50 per unit
C)$939.40 per unit
D)$1,151.80 per unit
Expected Production
Direct Labor-Hours Per Unit
Total Direct Labor-Hours
Product A3
900
8.0
7,200
Product Y6
800
10.0
8,000
Total direct labor-hours
15,200
Explanation / Answer
Direct materials 256.20 Direct labor 242.00 =24.2*10 Overhead 653.60 =(993450/15200*8000)/800 Unit cost 1151.80 Option D is correct
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