Answer:
Lillich, Inc.
The unit product cost of Products U6 under activity-based costing is closest to: $1,460
Explanation:
a) Data about expected production of Products U6 and R5:
Expected Direct Labor-Hours Total Direct
Production Per Unit Labor-Hours
Product U6 640 8.4 5,376
Product R5 1,015 5.4 5,481
Total direct labor-hours 10,857
The direct labor rate is $27.50 per DLH.
Direct Materials Cost per Unit Product U6$249.30 Product R5 $166.70
Activity Cost Pools Activity Estimated Expected Activity
Measures Overhead Product U6 Product R5 Total
Cost
Labor-related DLHs $ 196,138 5,376 5,481 10,857
Production orders Orders 67,340 800 700 1,500
Order size MHs 1,015,108 5,400 5,700 11,100
$1,278,586
Overhead Costs:
Product U6 Product R5 Total
Labor-related overhead costs $97,121 $99,017 $196,138
Production orders 35,915 31,425 67,340
Order size 493,836 521,272 1,015,108
Manufacturing overheads $626,872 $651,714 $1,278,586
The direct labor rate is $27.50 per DLH
Product U6 Product R5 Total
Expected Production 640 1,015
Direct labor hours 5,376 5,481 10,857
Direct Materials Cost per Unit $249.30 $166.70
Direct material costs $159,552 $169,200.50 $328,752.50
Direct labor costs 147,840 150,727.50 298,567.50
Manufacturing overhead 626,872 651,714.00 1,278,586.00
Total production costs $934,264 $971,642.00 $1,905,906.00
Unit cost $1,459.79 $957.28
