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21 September, 00:23

Salvatori, Inc., manufactures and sells two products: Product A4 and Product Q5. 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 A4 600 7.0 4,200 Product Q5 900 4.0 3,600 Total direct labor-hours 7,800 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 A4 Product Q5 Total Labor-related DLHs $ 163,058 4,200 3,600 7,800 Machine setups setups 10,550 800 700 1,500 Order size MHs 499,527 4,200 4,500 8,700 $ 673,135 The overhead applied to each unit of Product A4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

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  1. 21 September, 03:49
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    Overhead applied per unit = $557.61

    Explanation:

    As per the data given in the question,

    Particulars A B C=A : B D C * D

    Activity cost Estimated Total expected Activity Product A4 Product A4

    Pool OH cost Activities Rate Expected activities total OH cost

    Labor related $163,058 $7,800 20.90 4,200 $87,780

    Machine setup $10,550 $1,500 7.03 800 $5,624

    Order size $499,527 $8,700 57.42 4,200 $241,164

    Total overhead cost = $334,568

    Activity rate = Estimated OH cost : Total expected activity

    Product A4 overhead = Product A4 expected activity * activity rate

    Overhead applied per unit = Total overhead applied : Expected production of A4

    = $334,568 : 600 units

    =$557.61
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