Matamoros, Inc., manufactures and sells two products: Product D7 and Product J3. 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 D76005.03,000Product J31007.0700Total direct labor-hours 3,700The 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 D7Product J3TotalLabor-relatedDLHs$66,1933,0007003,700Machine setupssetups 65,772400500900Order sizeMHs 153,9323,0002,8005,800 $285,897 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 J3 would be closest to: (Round your intermediate calculations to 2 decimal places.)
A. $125.23 per unit
B. $511.56 per unit
C. $540.89 per unit
D. $185.78 per unit
Answer: C
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