Question

13)

Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.

Direct material cost per unit of G2	$	13
Total estimated manufacturing overhead	$	312,000
Total cost per unit of G2	$	28
Total estimated direct labor hours		156,000	DLH
Direct labor cost per unit of G2	$	4.85

Multiple Choice

5.08 DLH per unit of G2.

17.85 DLH per unit of G2.

8.60 DLH per unit of G2.

0.52 DLH per unit of G2.

2.00 DLH per unit of G2.

14)

A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:

				Budgeted Activity
Activity Cost Pool	Budgeted Cost			Product A			Product B
Activity 1	$	101,000			4,400			4,200
Activity 2	$	76,000			5,900			6,900
Activity 3	$	121,000			3,900			6,650

Annual production and sales level of Product A is 35,700 units, and the annual production and sales level of Product B is 70,950 units. What is the approximate overhead cost per unit of Product A under activity-based costing?

Multiple Choice

$3.68

$10.27

$11.74

$1.60

$2.35

Answer 1

Ans 13
Direct material+direct labor+applied overhead=Total cost
$13+4.85+x=28
x=28-13-4.85	10.15	overhead per unit
Estimated overhead rate
312000/156000	2.0
Direct labor hours=10.15/2	5.08
Correct option
5.08 DLH per unit of G2.
ans 14
Activity Cost Pools		Estimated Overhead O	Expected Use of C	Activity rate A=O/C	Product A	Cost allocated H*A
			Cost Drivers
Activity 1		$101,000	8,600	$11.74	4,400	$51,674
Activity 2		76,000	12,800	$5.94	5,900	$35,031
Activity 3		121,000	10,550	$11.47	3,900	$44,730
				Total overhead allocated T		$131,436
				No of units N'		35700
				Overhead cost per unit T/N		$3.68
Option A $3.68
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