Kebort Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labour-hours (DLHs). The company has two products, U86Y and M91F, about which it has provided the following data:

The company's estimated total manufacturing overhead for the year is $2,541,760 and the company's estimated total direct labour-hours for the year is 47,000.

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:

-(Appendix 5B)The unit product cost of product M91F under the activity-based costing system is closest to:

Question

Kebort Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labour-hours (DLHs). The company has two products, U86Y and M91F, about which it has provided the following data:

The company's estimated total manufacturing overhead for the year is $2,541,760 and the company's estimated total direct labour-hours for the year is 47,000.

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:

-(Appendix 5B)The unit product cost of product M91F under the activity-based costing system is closest to:

Quizplus · Accepted Answer

Activity-based costing allocates overhead costs more accurately by assigning costs to products based on the activities required to produce them. The unit product cost of $216.77 is likely calculated by summing the direct materials, direct labor, and the allocated overhead costs specific to product M91F.

Kebort Manufacturing Corporation Has a Traditional Costing System in Which