TB MC Qu. 4-27 (Algo) Chrzan, Incorporated, manufactures...
Chrzan, Incorporated, manufactures and sells two products: Product EO and Product NO. Data concerning the expected production of each product and
the expected total direct labor-hours (DLHs) required to produce that output appear below:
Direct Total
Labor- Direct
Labor-
Expected Hours Per
Production Unit Hours
Product E0 410 10.1 4,141
Product NO 1,550 9.1 14,105
Total direct labor-hours 18,246
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity
Overhead
Activity Cost Pools Measures Cost Product E0 Product NO Total
Labor-related DLHs $ 301,890 4,141 14,105 18,246
Production orders orders 61,087 850 950 1,800
Order size MHs 585,366 5,550 5,250 10,800
$ 948,343
The activity rate for the Order Size activity cost pool under activity-based costing is closest to: