Alex Inc., manufactures and sells two products: Product L7 and Product 03. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product L7 Product 03 Total direct labor-hours Expected Direct Labor-Hours Per Total Direct Labor- Production Unit Hours 6.0 2,400 4.0 3,600 6,000 400 900 The direct labor rate is $15.60 per DLH. The direct materials cost per unit is $257.70 for Product L7 and $288.30 for Product 03. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Labor-related Machine setups General factory Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product L7 Product 03 Total DLHs 2,400 3,600 6,000 $72,180 64,421 Setups 400 300 700 MHs 529,100 3,400 3,100 6,500 $665,701 Estimated Required: In all computations involving dollars in the following requirements, round off your answer to the nearest whole cent. 1. Compute the activity rates under the activity-based costing system. 2. Determine how much overhead would be assigned to each product under the activity-based costing system. 3. Determine the unit product cost of each product under the activity-based costing method.

Solved: Alex Inc., manufactures and sells two products: Product L7 and Product

Home
questions and answers
alex inc manufactures and sells two products product l7 and product 03

Question

Alex Inc., manufactures and sells two products: Product L7 and Product 03. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product L7 Product 03 Total direct labor-hours Expected Direct Labor-Hours Per Total Direct La