Reference no: EM13646324

Use the following to answer questions:

Koszyk Manufacturing Corporation has a traditional 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, P85G and C43S, about which it has provided the following data:

		P85G	C43S
	Direct materials per unit..........	$36.50	$63.10
	Direct labor per unit................	$20.80	$31.20
	Direct labor-hours per unit......	0.80	1.20
	Annual production..................	35,000	10,000

The company's estimated total manufacturing overhead for the year is $2,264,000 and the company's estimated total direct labor-hours for the year is 40,000.

The company is considering using a variation of activity-based costing to determine 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 (DLHs).....	$1,160,000
	Setting up machines (setups).........	288,000
	Parts administration (part types)....	816,000
	Total...............................................	$2,264,000

		Expected Activity
		P85G	C43S	Total
	DLHs............	28,000	12,000	40,000
	Setups...........	1,480	920	2,400
	Part types......	1,880	840	2,720

1.  The manufacturing overhead that would be applied to a unit of product P85G under the company's traditional costing system is closest to:

A) $89.67

B) $45.28

C) $44.39

D) $23.20

2. The manufacturing overhead that would be applied to a unit of product C43S under the activity-based costing system is closest to:

A) $71.04

B) $138.96

C) $67.92

D) $11.04