Shininger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, G27U and W21K, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000.

The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:

-The manufacturing overhead that would be applied to a unit of product G27U under the company's traditional costing system is closest to:
A)$8.21
B)$3.20
C)$11.73
D)$19.94

Question

Shininger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, G27U and W21K, about which it has provided the following data:  The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000.

The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:
 
-The manufacturing overhead that would be applied to a unit of product G27U under the company's traditional costing system is closest to:
A)$8.21 
B)$3.20 
C)$11.73 
D)$19.94

Quizplus · Accepted Answer

The Answer is A

Shininger Manufacturing Corporation Has a Traditional Costing System in Which