Gradwell, Inc., manufactures and sells two products: Product K8 and Product I4. 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 K8300 5.0 1,500 Product I4900 3.0 2,700 Total direct labor-hours 4,200 The direct labor rate is $17.20 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per UnitProduct K8$150.20 Product I4$243.70 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 K8Product I4TotalLabor-relatedDLHs$176,064 1,5002,7004,200Machine setupssetups 71,290 4006001,000Order sizeMHs 121,396 4,3004,6008,900 $368,750 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 K8 would be closest to: (Round your intermediate calculations to 2 decimal places.)
A. $209.60 per unit
B. $68.20 per unit
C. $439.00 per unit
D. $356.45 per unit
Answer: C
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