Question

TB MC Qu. 4-44 Privott, Inc., manufactures ... Privott, Inc., manufactures and sells two products: Product Z9 and Product N0. 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 Cost Pools Activity Measures Overhead Cost Product Z9 Product N0 Total Labor-related DLHs $ 339,018 7,900 4,500 12,400 Product testing tests 53,247 1,150 1,250 2,400 Order size MHs 478,608 5,500 5,800 11,300 $ 870,873 The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:

Answer 1

labour related activity cost per labour hour = $339,018/ 12,400 = $27.34

Product Z9 = $27.34 * 7900 = $215,987

Product N0 = $27.34*4500 = $123,031

Step-by-step explanation: