Business, 11.03.2020 23:03 memeitupkevin

Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 1,700 units of Basic Product and 1,100 units of Deluxe Product. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Basic Product requires 0.3 direct labor hours per unit and Deluxe Product requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $98,785.The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools—Activity 1, Activity 2, and General Factory—with estimated overhead costs and expected activity as follows:Estimated Expected ActivityActivity Cost Pool Overhead Costs Basic Product Deluxe Product TotalActivity 1 $ 30,528 1,000 600 1,600 Activity 2 17,385 1,700 200 1,900 General Factory 50,872 510 660 1,170 Total $ 98,785 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.)The predetermined overhead rate under the traditional costing system is closest to:a. $9.15.b. $43.48.c. $84.43.d. $19.08.

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Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales ar...

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