Look Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, N06D and M09K, about which it has provided the following data: N06DM09KDirect materials per unit$28.80? $68.90? Direct labor per unit$13.00? $33.00? Direct labor-hours per unit 0.20? 1.00? Annual production (units) 47,400? 17,100? The company's estimated total manufacturing overhead for the year is $1,342,135 and the company's estimated total direct labor-hours for the year is 26,580.The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed
activity-based costing system appear below:Activities and Activity MeasuresEstimatedOverhead CostSupporting direct labor (DLHs)$637,920? Setting up machines (setups) 311,818? Parts administration (part types) 392,397? Total$1,342,135? Expected Activity N06DM09KTotalDLHs9480?17,100?26,580?Setups1330?997?2327?Part types626?315?941?The manufacturing overhead that would be applied to a unit of product M09K under the activity-based costing system is closest to:
A. $17.09
B. $80.55
C. $39.49
D. $50.04
Answer: C
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Answer the following statement true (T) or false (F)
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A. assumptive close method. B. alternative choice method. C. direct request method. D. balance sheet method. E. benefit summary method.
An abbreviated version of an account which is useful for analyzing the effects of business transactions is the
a. chart of accounts b. double entry system c. T account d. trial balance
Which of the following statements is true of value-based pricing?
A. It is a modification ofuniform delivered pricing. B. It is sometimes called postage stamp pricing. C. Ithas grown out of the quality movement. D. It presents drawbacks if costs are continually rising.