Data concerning Cranur Architects Corporation€™s two major business lines are given below:

The company has a traditional costing system in which architecture department overhead is applied to units (square metres of architectural drawings) based on direct labour-hours. Data concerning architecture department overhead and direct labour-hours for the upcoming year appear below:
Estimated total architecture department overhead . . . . . . . . . . . . . . . . . $670,000
Estimated total direct labour-hours. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 DLHs
Required:
1. Determine the unit costs of the Commercial and Residential products under the company€™s traditional costing system.
2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an ABC system. The ABC system would have the following three activity cost pools:

Determine the unit costs (cost per square metre of architectural drawings) of the Commercial and Residential lines of business under the ABC system.

Transcribed Image Text:

Commercial Residential Direct materials per square metre.. Direct labour per square metre... Direct labour-hours per square metre........ Estimated annual autput.... S600 $4.50 $36 0.075 DLHS 280,000 m? ....... $48 40,000 m? .....