Arntson, Inc., manufactures and sells two products: Product R3 and Product N0. The annual production and sales of Product of R3 is 200 units and of Product N0 is 100 units. 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-Hours
Product R3 200 8.0 1,600
Product N0 100 11.0 1,100
Total direct labor-hours 2,700
The direct labor rate is $15.80 per DLH. The direct materials cost per unit is $287.80 for Product R3 and $104.80 for Product N0.
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated Expected Activity
Activity Cost Pools Activity Measures Overhead Cost Product R3 Product N0 Total
Labor-related DLHs $ 39,636 1,600 1,100 2,700
Production orders orders 57,421 600 700 1,300
Order size MHs 432,075 3,600 3,900 7,500
$ 529,132
The unit product cost of Product R3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
A. $2,177.97 per unit
B. $1,451.18 per unit
C. $1,701.13 per unit
D. $1,981.96 per unit