Evaluate total manufacturing overhead for the year

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Reference no: EM134014

Question :

MC Qu. 5 Shininger Manufacturing Corporation has a traditional...

Shininger Manufacturing Corporation has a conventional 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, W21K and G27U, about which it has provided the subsequent data:

G27U W21K

Direct materials per unit $29.50 $60.80

Direct labor per unit $7.00 $30.00

Direct labor-hours per unit 0.20 1.00

Annual production 48,400 16,100

The company's evaluated total manufacturing overhead for the year is $1,587,876 and the company's estimated net direct labor-hours for the year is 25,780.

The company is considering using a variation of activity-based costing to evaluate 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 hours (DLHs) $773,400

Setting up machines (setups) 437,708

Parts administration (part types) 376,768

Total $ 1,587,876

Expected Activity

G27U W21K Total

DLHs 9,680 16,100 25,780

Setups 1,970 1,028 2,998

Part types 653 275 928

The manufacturing overhead that could be applied to a unit of product G27U under the company's traditional costing system is closest to:

$23.85

$7.31

$15.84

$12.32

Reference no: EM134014

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