Vattes, Incorporated, manufactures and sells two products: Product 15 and Product U1. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Unit $ 261.60 $121.60 Direct Labor- Expected Hours Per Production Unit 700 7.0 200 4.0 Product 15 4,900 Product U1 800 Total direct labor-hours 5,700 The direct labor rate is $22.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Activity Cost Pools Labor-related Machine setups Order size Product 15 Product U1 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity Expected Activity Product 15 Product U1 4,900 300 4,900 Activity Measures DLHS setups MHS Total Direct Labor- Hours Estimated Overhead Cost $268,698 37,324 633,895 $ 939,917 800 400 4,800 Total 5,700 700 9,700

Vattes, Incorporated, manufactures and sells two products: Product 15 and Product U1. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Unit $ 261.60 $121.60 Direct Labor- Expected Hours Per Production Unit 700 7.0 200 4.0 Product 15 4,900 Product U1 800 Total direct labor-hours 5,700 The direct labor rate is $22.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Activity Cost Pools Labor-related Machine setups Order size Product 15 Product U1 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity Expected Activity Product 15 Product U1 4,900 300 4,900 Activity Measures DLHS setups MHS Total Direct Labor- Hours Estimated Overhead Cost $268,698 37,324 633,895 $ 939,917 800 400 4,800 Total 5,700 700 9,700

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...

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