Diemer, Inc., manufactures and sells two products: Product N4 and Product R7. 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: If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to:
A)$39.68 per DLH
B)$81.82 per DLH
C)$29.71 per DLH
D)$47.79 per DLH

Question

Diemer, Inc., manufactures and sells two products: Product N4 and Product R7. 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:  If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to:
A)$39.68 per DLH 
B)$81.82 per DLH 
C)$29.71 per DLH 
D)$47.79 per DLH

Quizplus · Accepted Answer

The Answer of Diemer, Inc., manufactures and sells two products: Product N4 and Product R7. 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:  If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to:
A)$39.68 per DLH 
B)$81.82 per DLH 
C)$29.71 per DLH 
D)$47.79 per DLH