Faz Inc manufactures and sells two products: Product X0 and Product W7. Data concerning the expected production of each product and the expected total direct labor hours (DLHs) required to produce that output appears below:

	Expected Production	Direct Labor Hours per unit	Total Direct labor-hours
Product X0	1000	5	5,000
Product W7	520	3	1,560
Total direct labor-hours			6,560

The direct labor rate is $31.60 per DLH. The direct materials cost per unit is $156.50 for Product X0 and $138 for Product W7.

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

Activity Cost Pools	Activity Measures	Estimated Overhead Cost	Product X0	Product W7	Total
Labor-related	DLLs	$284,078	5,000	1,560	6,560
Production orders	Orders	$20,148	620	820	1,440
Order size	MHs	$247,094	4,120	4,220	8,340
		$551,320

The overhead applied to each of Product X0 under Activity-based costing is closest to:

A: $350.36 per unit

B: $420.21 per unit

C: $347.25 per unit

D: $122.08 per unit

Answer rating: 100% (QA)

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