Brenneis,Inc. ,manufactures and sells two products: Product T9 and Product T2.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 $18.10 per DLH.The direct materials cost per unit is $115.20 for Product T9 and $221.40 for Product T2. 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 T9 would be closest to:
A)$672.48 per unit
B)$201.36 per unit
C)$277.62 per unit
D)$504.60 per unit

Question

Brenneis,Inc. ,manufactures and sells two products: Product T9 and Product T2.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 $18.10 per DLH.The direct materials cost per unit is $115.20 for Product T9 and $221.40 for Product T2. 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 T9 would be closest to:
A)$672.48 per unit 
B)$201.36 per unit 
C)$277.62 per unit 
D)$504.60 per unit

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $1,412,156 ÷ 12,600 DLHs = $112.08 per DLH (rounded)
Product T9: 6.0 DLHs × $112.08 per DLH = $672.48