Teehan, Inc., manufactures and sells two products: Product U2 and Product W5. 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 U24006.02,400Product W52008.01,600Total direct labor-hours 4,000The direct labor rate is $20.40 per DLH. The direct materials cost per unit for each product is given below: Direct MaterialsCost per UnitProduct U2$249.40 Product W5$164.40 The 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 U2Product
W5TotalLabor-relatedDLHs$92,1202,4001,6004,000Machine setupssetups 18,4685007001,200Order sizeMHs 202,5473,1002,8005,900 $313,135 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 W5 would be closest to: (Round your intermediate calculations to 2 decimal places.)
A. $626.24 per unit
B. $123.12 per unit
C. $274.64 per unit
D. $184.24 per unit
Answer: A
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