Overturf, Inc., manufactures and sells two products: Product Y1 and Product Y0. 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 Y1300 6.0 1,800 Product Y0500 9.0 4,500 Total direct labor-hours 6,300 The direct labor rate is $27.50 per DLH. The direct materials cost per unit is $106.10 for Product Y1 and $168.40 for Product Y0.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 Y1Product
Y0TotalLabor-relatedDLHs$151,263 1,8004,5006,300Production ordersorders 43,253 300400700Order sizeMHs 863,478 4,9005,0009,900 $1,057,994 The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:
A. $106.87 per order
B. $172.70 per order
C. $61.79 per order
D. $176.22 per order
Answer: C
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