Answer:
XYZ Inc.
The unit product cost of Product Z5 under activity-based costing is closest to:
= $999.62.
Explanation:
a) Data and Calculations:
Product B7 Product Z5 Total
Expected Production 300 800
Per Unit 5.0 3.0
Total Direct Labor-Hours 1,500 2,400 3,900
Direct labor rate per DLH $15.10 $15.10
Total direct labor costs $22,650 $36,240
Direct materials per unit $136.20 $204.40
Total direct materials costs $204,300 $490,560
Activity cost pools Activity Estimated Expected activity
measures overhead cost Product B7 Product Z5 Total
Labor-related DLHs $39,585 1,500 2,400 3,900
Production orders Orders $26,884 500 600 1,100
Order size MHs $462,768 4,600 4,700 9,300
Rates
Labor-related $10.15 ($39,585/3,900)
Production orders 24.44 ($26,884/1,100)
Order size 49.76 ($462,768/9,300)
Product Z5
Labor-related $24,360 ($10.15 * 2,400)
Production orders $14,664 (24.44 * 600)
Order size $233,872 ($49.76 * 4,700)
Total overhead $272,896
Product Z5
Direct materials $490,560
Direct labor 36,240
Overhead 272,896
Total costs $799,696
Unit cost = $999.62 ($799,696/800)
