Question

Mahaley, Inc., manufactures and sells two products: Product Q9 and Product F0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product Q9 920 9.2 8464 Product F0 920 7.2 6624 Total direct labor-hours 15,088 The direct labor rate is $23.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product Q9 $176.10 Product F0 $147.90 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product Q9 Product F0 Total Labor-related DLHs $ 391,680 8464 6624 15,088 Machine setups setups 49,830 900 800 1700 General factory MHs 290,700 4300 4100 8400 $ 732,210 The unit product cost of Product F0 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Group of answer choices $387.70 per unit $514.54 per unit $754.34 per unit $680.14 per unit

Answer 1

Answer:

$754.34 per unit

Explanation:

Expected production of product F0 = 920 units

Total Product Cost F0

Total Direct labor hours cost = 6624 hours * $23 / hr = $152,352  

Direct material cost- = 147.90 * 920 units = $136,068

Total Overheads cost of F0 ;

DLHs - 391,680 * 6624 /15088 = 171,957

Setup - 49,830 * 800 / 1700 = 56,949

MHs - 290,700 * 4100 / 8400 = 141,889

Total Overhead cost of F0 = 370,795

Total Product F0 cost = Total direct labor cost + Total direct material cost + total Overhead cost

Total product cost for F0 = 152,352 + 136,068 + 370,795 = $659,215

Total per unit cost for product F0 = $659,215 / 920 units = $754.34 / unit