direct labor hours) 462,000 7,000 70,000 77,000 Barch setups ( setups) 99,000 200 100 300 Safety testing ( test) 58,000 30 70 100 Total manufacturing overhead cost 619,000 Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the comany's two product lines appear bellow:
| Deluxe | Standard | |
| Direct materials per unit | 57.00 |
45.00 |
| Direct labor per unit | 15.00 | 12.40 |
| Direct labor-hours per unit | 0.70 DlHs | 1.40 DlHs |
| Direct labour | 10,000 units | 50,000 units |
The company has a traditional costing system in wich manufacturing
| Estimated total manufacturing overhead | 619,000 |
| estimated total direct labor-hours | 77,000 DlHs |
Required:
1. Determine the unit product costs of the Deluxe and Standard products under the Company's traditional costing System.
2. The companu is considering replacing its traditional costing System with an activity-based absorption costing system that would have the following three activity cost pools:
| Expected activity | Expected activity | Expected activity | ||
| Activity Cost Pool ( and Activity Measures ) | Estimated Overhead cost | Deluxe | Standard | Total |
| Supporting direct labor ( direct labor hours) | 462,000 | 7,000 | 70,000 | 77,000 |
| Barch setups ( setups) | 99,000 | 200 | 100 | 300 |
| Safety testing ( test) | 58,000 | 30 | 70 | 100 |
| Total |
619,000 |
Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system
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