Sow,Inc. ,manufactures and sells two products: Product I4 and Product P3.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 unit product cost of Product P3 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:
A)$1,216.79 per unit
B)$1,139.21 per unit
C)$573.83 per unit
D)$1,232.18 per unit

Question

Sow,Inc. ,manufactures and sells two products: Product I4 and Product P3.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 unit product cost of Product P3 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:
A)$1,216.79 per unit 
B)$1,139.21 per unit 
C)$573.83 per unit 
D)$1,232.18 per unit

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $883,402 ÷ 9,200 DLHs = $96.02 per DLH (rounded)
Computation of traditional unit product cost:
 11eaa3fe_334b_1274_908b_c755374161ca_TB2461_00

Sow,Inc ,Manufactures and Sells Two Products: Product I4 and Product