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: The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A)$138.90 per DLH
B)$33.26 per DLH
C)$208.35 per DLH
D)$1,637.37 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:  The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A)$138.90 per DLH 
B)$33.26 per DLH 
C)$208.35 per DLH 
D)$1,637.37 per DLH

Quizplus · Accepted Answer

Activity rate = Estimated overhead cost ÷ Total expected activity
= $372,512 ÷ 11,200 DLHs = $33.26 per DLH

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