Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the...
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Accounting
Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Production
Direct Labor-Hours Per Unit
Total Direct Labor-Hours
Product E1
900
10.0
9,000
Product A7
600
5.0
3,000
Total direct labor-hours
12,000
The direct labor rate is $25.90 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials Cost per Unit
Product E1
$284.00
Product A7
$240.00
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product E1
Product A7
Total
Labor-related
DLHs
$
120,900
9,000
3,000
12,000
Machine setups
setups
57,020
1,000
600
1,600
Order size
MHs
891,840
4,000
2,600
6,600
$
1,069,760
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
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