Russell Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products
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Question:
Slow | Fast | ||||||
Direct materials per unit | $ | 14.10 | $ | 43.40 | |||
Direct labor per unit | $ | 3.20 | $ | 25.60 | |||
Direct labor-hours per unit | 0.20 | 1.00 | |||||
Annual production | 30,000 | 15,000 | |||||
The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000.
The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity Measures | Estimated Overhead Cost | |||
Assembling products (DLHs) | $ | 720,000 | ||
Preparing batches (batches) | 362,700 | |||
Product support (product variations) | 444,000 | |||
Total | $ | 1,526,700 | ||
Expected Activity | |||||
Slow | Fast | Total | |||
DLHs | 6,000 | 24,000 | 30,000 | ||
Batches | 1,380 | 1,410 | 2,790 | ||
Product variations | 570 | 540 | 1,110 | ||
The manufacturing overhead that would be applied to a unit of product Slow under the company's traditional costing system is closest to:
- $18.38.
- $28.56.
- $10.18.
- $4.80
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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