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: The overhead applied to each unit of Product N4 under activity-based costing is closest to:
A)$216.66 per unit
B)$197.39 per unit
C)$301.08 per unit
D)$125.43 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:  The overhead applied to each unit of Product N4 under activity-based costing is closest to:
A)$216.66 per unit 
B)$197.39 per unit 
C)$301.08 per unit 
D)$125.43 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:  The overhead applied to each unit of Product N4 under activity-based costing is closest to:
A)$216.66 per unit 
B)$197.39 per unit 
C)$301.08 per unit 
D)$125.43 per unit