Business, 19.05.2020 19:58 raul20030603

Lefave, Inc., manufactures and sells two products: Product Q1 and Product D5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:

Expected Direct Labor-Hours Total Direct
Production Per Unit Labor-Hours
Product Q1 2,000 6.0 12,000
Product D5 900 3.0 2,700
Total direct labor-hours 14,700

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Activity Estimated Expected Activity
Activity Cost Pools Measures Overhead Cost Product Q1 Product D5 Total
Labor-related DLHs $162,482 12,000 2,700 14,700
Product testing tests 58,909 900 800 1,700
Order size MHs 214,825 4,800 4,700 9,500
$436,216

If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, the predetermined overhead rate would be closest to $ per DLH.

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Lefave, Inc., manufactures and sells two products: Product Q1 and Product D5. Data concerning the ex...

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