Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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 Production Orders activity cost pool under activity-based costing is closest to:
A)$77.24 per order
B)$138.89 per order
C)$93.87 per order
D)$126.64 per order

Question

Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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 Production Orders activity cost pool under activity-based costing is closest to:
A)$77.24 per order 
B)$138.89 per order 
C)$93.87 per order 
D)$126.64 per order

Quizplus · Accepted Answer

The Answer of Pachero, Inc., manufactures and sells two products: Product T1 and Product U6. 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 $15.90 per DLH. The direct materials cost per unit is $259.80 for Product T1 and $188.80 for Product U6. 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 Production Orders activity cost pool under activity-based costing is closest to:
A)$77.24 per order 
B)$138.89 per order 
C)$93.87 per order 
D)$126.64 per order