(Appendix 2A) Poma Manufacturing Corporation Has a Traditional Costing System

question 7

Multiple Choice

(Appendix 2A) Poma 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, R78S and N32Y, about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $1,427,040 and the company's estimated total direct labor-hours for the year is 24,000.
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:

-The unit product cost of product N32Y under the activity-based costing system is closest to:

• A) $136.00
• B) $76.70
• C) $59.30
• D) $136.16

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Definitions:

Arithmetic Progression

A sequence of numbers in which each term after the first is obtained by adding a constant, known as the common difference, to the preceding term.

Output Per Head

The average production of goods and services per individual in a specific period, typically used to measure labor productivity.

Accelerated

A process or rate that increases speed or velocity, often used in various contexts such as economic growth or depreciation.

Industrial Revolution

The period of major industrialization that took place during the late 1700s and early 1800s, significantly changing the economy, society, and culture of the time through advancements in technology.