Addy company has 2 products: A and B. The annual production and sales of Product A is 1700 units, and the annual production and sales of Product B is 1100 units. The company has traditionally used Direct Labor Hours to apply all manufacturing overhead to products. Product A requires 0.3 Direct Labor Hours per unit. Product B requires 0.6 Direct Labor Hours per unit. Total estimated overhead for the period is $98,785The company is considering switching to an Activity Based Costing system. The new ABC system would have 3 overhead cost pools, with overhead costs and activity as follows: Estimated Overhead Expected ActivityActivities Cost Product A Product B Product CActivity 1 $30,528 1000 MH 600 MH 1600 MHActivity 2 $17,385 1700 Setups 200 Setups 1900 SetupsTotal $50,872 510 DLH 660 DLH 1170 DLHThe pre-determined overhead rate under the traditional costing system is closest to:a. $9.15.b. $43.48.c. $84.43.d. $19.08.

Addy

Predetermined overhead rate

c. $84.43

Explanation:

a) Data and Calculations:

Product A requires 0.3 Direct Labor Hours per unit.

Product B requires 0.6 Direct Labor Hours per unit.

Total estimated overhead for the period is $98,785

Direct Labor Hours for A = 510

Direct Labor Hours for B = 660

Total Direct Labor Hours = 1,170

b) Addy's two products will have a predetermined overhead rate that is equal to $98,785/1,170, which is $84.43.  The predetermined overhead rate results from the division of the total estimated overhead for the period by the total number of direct labor hours for products A and B.  Addy applies this rate to each product based on the level of direct labor hours used in order to ascertain the amount of overhead attributable to the product.

the answer is true.  i do believe this is the answer because of the amount of wrecks people get into each year.  if you double this with avoiding those so said wrecks, that would make you a "skilled" driver.

answer; conceptual skills;