Feauto 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, I63E and E76I, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $4,467,600 and the company's estimated total direct labor-hours for the year is 162,000.The company is considering using a form 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 E76I under the activity-based costing system is closest to:
A) $68.38
B) $27.58
C) $148.92
D) $25.32

Question

Feauto 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, I63E and E76I, about which it has provided the following data:  The company's estimated total manufacturing overhead for the year is $4,467,600 and the company's estimated total direct labor-hours for the year is 162,000.The company is considering using a form 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 E76I under the activity-based costing system is closest to:
A) $68.38 
B) $27.58 
C) $148.92 
D) $25.32

Quizplus · Accepted Answer

The Answer of Feauto 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, I63E and E76I, about which it has provided the following data:  The company's estimated total manufacturing overhead for the year is $4,467,600 and the company's estimated total direct labor-hours for the year is 162,000.The company is considering using a form 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 E76I under the activity-based costing system is closest to:
A) $68.38 
B) $27.58 
C) $148.92 
D) $25.32

Feauto Manufacturing Corporation Has a Traditional Costing System in Which