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Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 163E and E761, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) The company's estimated total manufacturing overhead for the year is $3,345,900 and the company's estimated total direct labor-hours for the year is 91,200. 163E 163E $23.00 $19.00 The company is considering using a form of activity- based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations) Total Direct labor-hours. 0.80 57,000 Batches Expected Activity E76I 45,600 1,070 2,140 E76I $69.00 $ 57.00 2.40 19,000 Total 45,600 730 1,460 Estimated Overhead Cost $ 2,280,000 243, 100 822,800 $ 3,345,900 91,200 1,800 3,600 Product variations The manufacturing overhead that would be applied to a unit of product 163E under the company's traditional costing system is closest to: Multiple Choice $88.05

Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 163E and E761, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) The company's estimated total manufacturing overhead for the year is $3,345,900 and the company's estimated total direct labor-hours for the year is 91,200. 163E 163E $23.00 $19.00 The company is considering using a form of activity- based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations) Total Direct labor-hours. 0.80 57,000 Batches Expected Activity E76I 45,600 1,070 2,140 E76I $69.00 $ 57.00 2.40 19,000 Total 45,600 730 1,460 Estimated Overhead Cost $ 2,280,000 243, 100 822,800 $ 3,345,900 91,200 1,800 3,600 Product variations The manufacturing overhead that would be applied to a unit of product 163E under the company's traditional costing system is closest to: Multiple Choice $88.05

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 163E and E761, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) The company's estimated total manufacturing overhead for the year is $3,345,900 and the company's estimated total direct labor-hours for the year is 91,200. 163E 163E $23.00 $19.00 The company is considering using a form of activity- based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations) Total 0.80 57,000 Expected Activity E76I Batches 45,600 1,070 2,140 E76I $69.00 $ 57.00 2.40 19,000 Total 45,600 Direct labor-hours. Product variations The manufacturing overhead that would be applied to a unit of product 163E under the company's traditional costing system is closest to: Multiple Choice 730 1,460 Estimated Overhead Cost $ 2,280,000 243, 100 822,800 $ 3,345,900 91,200 1,800 3,600 $88.05 $58.70 $29.35 $36.69
Transcribed Image Text:Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 163E and E761, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) The company's estimated total manufacturing overhead for the year is $3,345,900 and the company's estimated total direct labor-hours for the year is 91,200. 163E 163E $23.00 $19.00 The company is considering using a form of activity- based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations) Total 0.80 57,000 Expected Activity E76I Batches 45,600 1,070 2,140 E76I $69.00 $ 57.00 2.40 19,000 Total 45,600 Direct labor-hours. Product variations The manufacturing overhead that would be applied to a unit of product 163E under the company's traditional costing system is closest to: Multiple Choice 730 1,460 Estimated Overhead Cost $ 2,280,000 243, 100 822,800 $ 3,345,900 91,200 1,800 3,600 $88.05 $58.70 $29.35 $36.69
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