Koszyk Manufacturing Corporation has a traditional costing system in which it ap
ID: 2486329 • Letter: K
Question
Koszyk Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, P85G and C43S, about which it has provided the following data: P85G C43S Direct materials per unit $27.20 $62.40 Direct labor per unit $11.00 $29.00 Direct labor-hours per unit 0.20 1.00 Annual production (units) 54,000 19,000 The company's estimated total manufacturing overhead for the year is $1,807,648 and the company's estimated total direct labor-hours for the year is 29,800. 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 Supporting direct labor (DLHs) $ 834,400 Setting up machines (setups) 542,568 Parts administration (part types) 430,680 Total $ 1,807,648 Expected Activity P85G C43S Total DLHs 10,800 19,000 29,800 Setups 1,420 1,024 2,444 Part types 719 251 970 The manufacturing overhead that would be applied to a unit of product P85G under the company's traditional costing system is closest to: (Round your intermediate calculations to 2 decimal places.)
Explanation / Answer
manufacturing overhead that would be applied to a unit of product P85G under the company's traditional costing system
Predetermined overhead rate = $1,807,648 ÷ 29,800 DLHs = $60.66 per DLH
Applied overhead per unit =
$60.66 per DLH × 0.20 DLHs per unit = $303.30 per unit
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.