Penegar, Inc., manufactures and sells two products: Product X7 and Product S4. 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 $21.60 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: 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 S4 would be closest to:
A)$627.96 per unit
B)$72.66 per unit
C)$407.10 per unit
D)$196.14 per unit

Question

Penegar, Inc., manufactures and sells two products: Product X7 and Product S4. 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 $21.60 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:  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 S4 would be closest to:
A)$627.96 per unit 
B)$72.66 per unit 
C)$407.10 per unit 
D)$196.14 per unit

Quizplus · Accepted Answer

The Answer of Penegar, Inc., manufactures and sells two products: Product X7 and Product S4. 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 $21.60 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:  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 S4 would be closest to:
A)$627.96 per unit 
B)$72.66 per unit 
C)$407.10 per unit 
D)$196.14 per unit