Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. 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 E18005.04,000Product A73002.0600Total direct labor-hours 4,600The direct labor rate is $18.40 per DLH. The direct materials cost per unit for each product is given below: Direct MaterialsCost per UnitProduct E1$127.10Product A7$299.80The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected ActivityActivity Cost PoolsActivity MeasuresOverhead CostProduct E1Product
A7TotalLabor-relatedDLHs$100,0964,0006004,600Machine setupssetups 47,208300400700Order sizeMHs 738,3684,1004,2008,300 $885,672 The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
A. $65.12 per MH
B. $192.54 per MH
C. $166.83 per MH
D. $88.96 per MH
Answer: D
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