Crimin, Inc., manufactures and sells two products: Product V7 and Product Y2.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 $19.80 per DLH.The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: The unit product cost of Product V7 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:
A)$536.45 per unit
B)$430.40 per unit
C)$748.65 per unit
D)$753.55 per unit

Question

Crimin, Inc., manufactures and sells two products: Product V7 and Product Y2.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 $19.80 per DLH.The direct materials cost per unit for each product is given below:  The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:  The unit product cost of Product V7 under the company's traditional costing method in which all overhead is allocated on the basis of direct labor-hours is closest to:
A)$536.45 per unit 
B)$430.40 per unit 
C)$748.65 per unit 
D)$753.55 per unit

Quizplus · Accepted Answer

Predetermined overhead rate = Estimated total overhead ÷ Total direct labor-hours
= $561,489 ÷ 6,300 DLHs = $89.13 per DLH (rounded)
Computation of traditional unit product cost: 11ea7998_5e9d_a10c_911b_efb157008ba9_TB2627_00_TB2627_00