Answer:
Seldomridge, Inc.
The unit product cost of Product UO under activity-based costing is closest to:
= $2,930.77
Explanation:
a) Data and Calculations:
Direct labor rate = $24.40
Product I5 Product U0 Total
Expected Production 700 200 900
Direct Labor-Hours Per Unit 7.0 10.0
Total Direct Labor-Hours 4,900 2,000 6,900
Total direct labor costs $119,560 $48,800 $168,360
Direct Materials Cost per Unit $116.10 $212.10
Total direct materials cost $81,200 $42,420 $123,620
Activity Estimated Activity Measures
Activity Cost Pools Measure Overhead Product I5 Product U0 Total
Labor-related DLHs $ 246,468 4,900 2,000 6,900
Product testing tests 10,494 500 400 900
Order size MHs 837,660 4,700 4,500 9,200
Total $ 1,094,622
Overhead Rates
Labor-related $35.72 ($246,468/6,900)
Product testing $11.66 ($10,494/900)
Order size $91.05 ($837,660/9,200)
Overhead applied to Product UO:
Labor-related = $71,440 ($35.72 * 2,000)
Product testing 4,664 ($11.66 * 400)
Order size 418,830 ($91.05 * 4,600)
Total overhead $494,934
Product UO
Direct labor costs $48,800
Direct materials costs 42,420
Overhead costs 494,934
Total product costs $586,154
Expected production units 200
Unit product cost = $2,930.77
