Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product R4 would be closest to:
A)$122.52 per unit
B)$174.00 per unit
C)$250.86 per unit
D)$91.38 per unit

Question

Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:  The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each product is given below:  The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product R4 would be closest to:
A)$122.52 per unit 
B)$174.00 per unit 
C)$250.86 per unit 
D)$91.38 per unit

Quizplus · Accepted Answer

The Answer of Serva, Inc., manufactures and sells two products: Product R4 and Product N4. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:  The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each product is given below:  The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product R4 would be closest to:
A)$122.52 per unit 
B)$174.00 per unit 
C)$250.86 per unit 
D)$91.38 per unit