Chrzan, Inc., manufactures and sells two products: Product E0 and Product N0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected ProductionDirect Labor-Hours Per UnitTotal Direct Labor-HoursProduct E03009.02,700Product N01,0008.08,000Total direct labor-hours 10,700The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct E0Product N0TotalLabor-relatedDLHs$296,3902,7008,00010,700Production ordersorders 55,587300400700Order sizeMHs 579,8665,0004,7009,700 $931,843 The activity rate for the Order
Size activity cost pool under activity-based costing is closest to:
A. $59.78 per MH
B. $87.09 per MH
C. $44.16 per MH
D. $37.05 per MH
Answer: A
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