Activity based costing & Traditional costing system
AsmaKuechle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, I49L and B26W, about which it has provided the following data: |
| 149L | B26W | |||
| Direct materials per unit | $ | 20.90 | $ | 65.60 |
| Direct labor per unit | $ | 21.30 | $ | 56.30 |
| Direct labor-hours per unit | 0.70 | 2.40 | ||
| Annual production | 30,800 | 17,500 | ||
The company's estimated total manufacturing overhead for the year is $2,997,452 and the company's estimated total direct labor-hours for the year is 63,560. |
The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: |
| Activities and Activity Measures | Estimated Overhead Cost | |
| Supporting direct labor (DLHs) | $ | 444,920 |
| Setting up machines (setups) | 810,852 | |
| Parts admission (part types) | 1,741,680 | |
| Total | $ | 2,997,452 |
| Activities | 149L | B26W | Total | |
| Supporting direct labor | 21,560 | 42,000 | 63,560 | |
| Setting up machines | 827 | 3,310 | 4,137 | |
| Parts admission | 2,060 | 1,630 | 3,690 | |
| Required: | |
| a. | Determine the unit product cost of each of the company's two products under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.) |
| 149L | B26W | |
| Unit product cost |
| b. | Determine the unit product cost of each of the company's two products under activity-based costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)
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14 years ago
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unit_costs.doc
