Poma 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, R78S and N32Y, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,427,040 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 unit product cost of product N32Y under the activity-based costing system is closest to:

Question

Poma 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, R78S and N32Y, about which it has provided the following data:  The company's estimated total manufacturing overhead for the year is $1,427,040 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 unit product cost of product N32Y under the activity-based costing system is closest to:

Quizplus · Accepted Answer

The activity rates for each activity cost pool are computed as follows:
 11eacbfc_c89f_6e00_8ffe_977db70bc5e1_TB7552_00 The overhead cost charged to Product N32Y is:
 11eacbfc_c89f_6e01_8ffe_9f5f022a84e4_TB7552_00 Overhead per unit of Product N32Y = $592,960 ÷ 10,000 units = $59.30 per unit
 11eacbfc_c89f_9512_8ffe_61ac0c73c110_TB7552_00

Poma Manufacturing Corporation Has a Traditional Costing System in Which