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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 600 8.0 4,800 Product A7 300 4.0 1,200 Total direct labor-hours 6,000 The direct labor rate is $24.90 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product E1 $206.00 Product A7 $225.00 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 $ 109,600 4,800 1,200 6,000 Machine setups setups 51,690 700 300 1,000 Order size MHs 808,470 2,800 3,500 6,300 $ 969,760 The total overhead applied to Product A7 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

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The total overhead applied to Product A7 under activity-based costing is closest to $482,086.

  • The total overhead applied is calculated with the following data from the question:

  •                            Activity    Estimated         Expected Activity

Activity Cost Pools  Measures  Overhead  Product E1  Product A7   Total

Labor-related          DLHs        $ 109,600           4,800        1,200    6,000

Machine setups      setups           51,690              700           300     1,000

Order size               MHs            808,470           2,800       3,500    6,300

Total                                        $ 969,760

  • Overhead Allocation using activity-based costing method:

                                          Total Costs         Product E1            Product A7

Labor-related       DLHs     $ 109,600        $87,680 (80%)     $21,920 (20%)

Machine setups   setups        51,690           36,183 (70%)        15,507 (30%)

Order size            MHs         808,470         363,811 (45%)     444,659 (55%)

Total                                  $ 969,760

Total overhead allocated to products    $487,674            $482,086

Thus, the calculation of the total overhead applied to Product A7 under the activity-based costing method is determined by the volume of activities that Product A7 consumed under each activity cost pool, as indicated by the percentages.

Learn more about the allocation of overhead using activity-based costing at https://brainly.com/question/14912137

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