Vattes, Inc., manufactures and sells two products: Product I5 and Product U1. 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-HoursProduct I5700 7.0 4,900 Product U1200 4.0 800 Total direct labor-hours 5,700 The direct labor rate is $22.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per UnitProduct I5$261.60 Product U1$121.60 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:Activity Cost PoolsActivity MeasuresEstimated Overhead
CostExpected Activity???Product I5Product U1TotalLabor-relatedDLHs$268,698 4,9008005,700Machine setupssetups 37,324 300400700Order sizeMHs 633,895 4,9004,8009,700 $939,917 If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the overhead assigned to each unit of Product U1 would be closest to: (Round your intermediate calculations to 2 decimal places.)
A. $188.56 per unit
B. $659.60 per unit
C. $213.28 per unit
D. $261.40 per unit
Answer: B
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