Item 7
Vanvalkenburg, Inc., manufactures and sells two products:
Product Q5 and Product J0. 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
Q5
Product
J0
Total
Labor-related
DLHs
$
191,748
3,000
2,800
5,800
Production orders
orders
70,536
300
500
800
Order
size
MHs
295,592
4,300
4,500
8,800
$
557,876
The activity rate for the Order Size activity cost pool...