Answer:
Gradwell, Inc.
The overhead applied to each unit of Product I4 under activity-based costing is closest to:_______.
$243.00 per unit.
Explanation:
a) Data and Calculations:
production per unit DL rate Total Labor Cost
product K8 300 5.0 1,500 $17.20 $25,800
product I4 900 3.0 2,700 $17.20 $46,440
total direct labor hours 4,200 $17.20 $72,240
production per unit Direct Materials Total Material Cost
product K8 300 $150.20 $45,060
product I4 900 $243.70 219,330
Total direct materials costs = $264,390
Estimated Expected activity
Activity Cost Pools Activity Measures Overhead Product Product Total
Cost K8 I4
labor related DLHs $176,064 1,500 2,700 4,200
machine setups setups 71,290 400 600 1,000
order size MHs 121,396 4,300 4,600 8,900
Total $368,750
Overhead Cost Allocation Product Product Total
K8 I4
Labor cost $62,880 $113,184 $176,064
Machine setups 28,516 42,774 71,290
Order size 58,652 62,744 121,396
Total $150,048 $218,702 $368,750
Quantity 300 900
Overhead per unit $500.16 $243.00
