Sepulvado, Inc., manufactures and sells two products: Product N7 and Product D4. 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 $15.50 per DLH. The direct materials cost per unit is $197.00 for Product N7 and $290.50 for Product D4. 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 overhead assigned to each unit of Product D4 would be closest to:
A)$413.84 per unit
B)$539.63 per unit
C)$128.80 per unit
D)$327.18 per unit

Question

Sepulvado, Inc., manufactures and sells two products: Product N7 and Product D4. 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 $15.50 per DLH. The direct materials cost per unit is $197.00 for Product N7 and $290.50 for Product D4. 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 overhead assigned to each unit of Product D4 would be closest to:
A)$413.84 per unit 
B)$539.63 per unit 
C)$128.80 per unit 
D)$327.18 per unit

Quizplus · Accepted Answer

The Answer of Sepulvado, Inc., manufactures and sells two products: Product N7 and Product D4. 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 $15.50 per DLH. The direct materials cost per unit is $197.00 for Product N7 and $290.50 for Product D4. 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 overhead assigned to each unit of Product D4 would be closest to:
A)$413.84 per unit 
B)$539.63 per unit 
C)$128.80 per unit 
D)$327.18 per unit