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:
$\begin{array}{|l|r|r|} \hline & \text { Slow } & \text { Fast } \\\text { Direct materials } \\\text { per unit }& \$ 14.10 & \$ 43.40 \\\hline \text { Direct labor per } & \$ 3.20 & \$ 25.60 \\\text { unit } \\\text { Direct labor-hours } \\\text { per unit }&0.20&1.60\\\hline \text { Annual production}& 30,000&15,000 \\\hline\end{array}$
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:
$\begin{array}{|lr|}\hline \text { Activities and Actirity Measures } & \text { Estimeted Overhead } \\ &\text {cost}\\\begin{array}{lr}\text { Assembling products (DLHs) }\end{array} & \$ 720,000 \\\hline \text { Preparing batches (batches) } & 362,700 \\\hline \text { Product support (product } \\\text { variations) } & 444,000 \\\hline \text { Total } & \$ 1,526,700 \\\hline\end{array}$

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

A) $81.42.
B) $65.02.
C) $146.44.
D) $12.22.

Correct Answer:

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