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 overhead assigned to each unit of Product J1 would be closest to:
A)$583.38 per unit
B)$511.70 per unit
C)$232.82 per unit
D)$479.92 per unit

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 overhead assigned to each unit of Product J1 would be closest to:
A)$583.38 per unit 
B)$511.70 per unit 
C)$232.82 per unit 
D)$479.92 per unit

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $818,686 ÷ 11,200 DLHs = $73.10 per DLH (rounded)
Product J1: 7.0 DLHs × $73.10 per DLH = $511.70

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