Use the Information Below to Answer the Following Question(s)

question 83

Multiple Choice

Use the information below to answer the following question(s) :
Martin Corporation manufactures two products-Plows and Harrows. The annual production and sales of Plows is 1,000 units, while 2,000 units of Harrows are produced and sold. The company has traditionally used direct labour hours to allocate its overhead to products. Plows require 5.0 direct labour hours per unit, while Harrows require 2.0 direct labour hours per unit. The total estimated overhead for the period is $603,500. The company is looking at the possibility of changing to an activity-based costing system for its products. If the company used an activity-based costing system, it would have the following three activity cost pools:
Expected Activity

-The predetermined overhead allocation rate using the traditional costing system would be closest to

• A) $43.20 per direct labour hour.
• B) $67.06 per direct labour hour.
• C) $60.30 per direct labour hour.
• D) $201.17 per direct labour hour.