- Russell Manufacturing Corporation Has A Traditional Costing System In Which It Applies Manufacturing Overhead To Its Pro 1 (485.03 KiB) Viewed 19 times
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Russell 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, Slow and Fast, about which it has provided the following data: Slow Fast $ 43.40 Direct materials per unit Direct labor per unit Direct labor-hours per unit $14.10 $ 3.20 $ 25.60 0.20 41,000 1.60 26,000 Annual production The company's estimated total manufacturing overhead for the year is $1,746,700 and the company's estimated total direct labor-hours for the year is 49,800 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: Estimated Overhead Cost Activities and Activity Measures Assembling products (DLHS) $ 830,000 Preparing batches (batches) 417,700 Product support (product variations) 499,000 Total $1,746, 700 Expected Activity Slow Fast Total 8,200 41,600 49,800 DLHS Batches 1,600 1,630 3,230 Product Variations 900 1,770 The manufacturing overhead that would be applied to a unit of product Slow under the company's traditional costing system is closest to