Minon,Inc. ,manufactures and sells two products: Product J1 and Product E7.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 $19.90 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 predetermined overhead rate would be closest to:
A)$68.56 per DLH
B)$73.10 per DLH
C)$83.34 per DLH
D)$33.26 per DLH

Question

Minon,Inc. ,manufactures and sells two products: Product J1 and Product E7.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 $19.90 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 predetermined overhead rate would be closest to:
A)$68.56 per DLH 
B)$73.10 per DLH 
C)$83.34 per DLH 
D)$33.26 per DLH

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $818,686 ÷ 11,200 DLHs = $73.10 per DLH (rounded)

Minon,Inc ,Manufactures and Sells Two Products: Product J1 and Product