Porche, Inc., manufactures and sells two products: Product D4 and Product N0.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:

Question

Porche, Inc., manufactures and sells two products: Product D4 and Product N0.Data concerning the expected production of each product and the expected total direct labor-hours  (DLHs)required to produce that output appear below:  The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:

Quizplus · Accepted Answer

Activity rate = Estimated overhead cost ÷ Total expected activity
= $32,414 ÷ 1,900 DLHs = $17.06 per DLH