Kroll, Inc., manufactures and sells two products: Product A4 and Product T6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Expected Production
Product A4: 800 units
Product T6: 300 units
Direct Labor-Hours Per Unit
Product A4: 7.0 DLHs
Product T6: 9.0 DLHs
Total Direct Labor-Hours
Product A4: 5,600 DLHs
Product T6: 2,700 DLHs
Total direct labor-hours: 8,300 DLHs
The direct labor rate is $21.50 per DLH. The direct materials cost per unit is $212.40 for Product A4 and $295.50 for Product T6.
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Activity Cost Pools
- Labor-related: Estimated overhead cost of $402,550
- Production orders: Estimated overhead cost of $61,705
- Order size: Estimated overhead cost of $656,110
Activity Measures
- Product A4: 5,600 DLHs
- Product T6: 2,700 DLHs
- Total: 8,300 DLHs
Expected Activity
- Product A4: 400 orders
- Product T6: 300 orders
- Total: 700 orders
Expected Activity
- Product A4: 3,600 MHs
- Product T6: 3,400 MHs
- Total: 7,000 MHs
The unit product cost of Product A4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)