Latiker, Inc., manufactures and sells two products: Product Y9 and Product WO. Data concerning the...
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Latiker, Inc., manufactures and sells two products: Product Y9 and Product WO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Total Direct Expected Hours Per Labor- Hours 800 1,000 1,800 Direct Labor- Production Product Y9 Product WO 100 100 Unit 8.0 10.0 Total direct labor-hours The direct labor rate is $15.40 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product Y9 Product WO $253.00 $278.80 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 Overhead Activity Cost Pools Measures Labor-related Machine setups Order size DLHs setups MHS 61,488 50,687 155,754 $267,929 Cost Product Y9 Product WO 800 400 1,000 300 5,200 Total 1,800 700 10,200 5,000 The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to: Multiple Choice $3115 per setup $26.27 per setup $29.95 per setup $72.41 per setup
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