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Category > Accounting Posted 04 Aug 2017 My Price 11.00

Koszyk Manufacturing Corporation

(Appendix 4A) Koszyk 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, P85G and C43S, about which it has provided the following data:

  P85G C43S
Direct materials per unit $36.50 $63.10
Direct labor per unit $20.80 $31.20
Direct labor-hours per unit 0.80 1.20
Annual production (units) 35,000 10,000


The company's estimated total manufacturing overhead for the year is $2,264,000 and the company's estimated total direct labor-hours for the year is 40,000.
The company is considering using a variation 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 Estimated Overhead Cost
Supporting direct labor (DLHs) $1,160,000
Setting up machines (setups) 288,000
Parts administration (part types) 816,000
Total $2,264,000

 

  Expected Activity
  P85G C43S Total
DLHs 28,000 12,000 40,000
Setups 1,480 920 2,400
Part types 1,880 840 2,720


The manufacturing overhead that would be applied to a unit of product P85G under the company's traditional costing system is closest to:

    $89.67
    $45.28
    $44.39
    $23.20

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Status NEW Posted 04 Aug 2017 08:08 PM My Price 11.00

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