Russell Manufacturing Corporation Has a Traditional Costing System in Which

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:
$\begin{array}{|l|r|r|} \hline& \text { Slow } & \text { Fas } \\\text { Direct materials } & \$ 14.10 & \$ 43.40 \\\text { per unit } & \\\hline \text { Direct labor per } &\$ 3.20 & \$ 25.60 \\\text { unit } \\\text { Direct labor-hours } & 0.20 & 1.60 \\\text { per unit } & &\\\hline \text { Annual production } & 30,000 & 15,000\\\hline\end{array}$
The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000.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:
$\begin{array}{|lr|}\hline \text { Activities and Actirity Measures } & \text { Estimeted Overhead } \\\begin{array}{lr}\text { Assembling products (DLHs) }\end{array} & \$ 720,000 \\\hline \text { Preparing batches (batches) } & 362,700 \\\hline \text { Product support (product } \\\text { variations) } & 444,000 \\\hline \text { Total } & \$ 1,526,700 \\\hline\end{array}$

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

A) $18.38.
B) $28.56.
C) $10.18.
D) $4.80.

Correct Answer:

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