Snavely, Inc

Subject:AccountingPrice:2.84 Bought3

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Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. 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	Direct Labor-Hours Per Unit	Total Direct Labor-Hours
Product E1	1,100	10.0	11,000
Product A7	500	5.0	2,500
Total direct labor-hours			13,500

The direct labor rate is $24.00 per DLH. The direct materials cost per unit for each product is given below:

	Direct Materials Cost per Unit
Product E1	$276.00
Product A7	$266.00

The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

		Estimated		Expected Activity
Activity Cost Pools	Activity Measures	Overhead Cost		Product E1	Product A7	Total
Labor-related	DLHs	$	130,200	11,000	2,500	13,500
Machine setups	setups		61,400	1,200	500	1,700
Order size	MHs		960,340	3,100	3,500	6,600
		$	1,151,940

The total overhead applied to Product E1 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

• $1,151,910

• $600,465

• $2,160,725 - I am getting CLOSER to this number, but I am not understanding fully. Could you please break it down for me? thank you!

• $451,081