Question

Arntson, Inc., manufactures and sells two products: Product R3 and Product N0. The annual production and sales of Product of R3 is 900 units and of Product N0 is 600 units. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: The unit product cost of Product R3 under activity-based costing is closest to:

Answer 1

Answer:

$671.92

Explanation:

Note: The full question is attached as picture below

Product R3

Labor-related cost = 40736/7200*5400

Labor-related cost = $30,552

Production orders = 65970/1600*1000

Production orders = $41,231

Order size = 433175/7100*3100

Order size = $189,133

Total overhead = Labor-related cost + Production orders + Order size

Total overhead = $30,552 + $41,231 + $189,133

Total overhead = $260,916

Annual production and sales of Product of R3 = 900 u nit

Overhead cost per unit = Total overhead / Unit

Overhead cost per unit = $260,916 / 900

Overhead cost per unit = $289.92

Direct material = $226

Direct labor = (26*6) = $156

Unit product cost = Overhead cost per unit + Direct material + Direct labor

Unit product cost = $289.92 + $226 + $156

Unit product cost = $671.92.