Curly-Soo, Inc. manufactures hair curlers and blow-dryers. The handheld hair curler is Curly-Soo's high volume product (80,000 units annually). It is a "large barrel," 20-watt, triple-heat appliance designed to appeal to the teenage market segment with its glow-in-the-dark handle. The handheld blow-dryer is Curly-Soo's lower-volume product (40,000 units annually). It is a three-speed, 2,000 watt appliance with a "cool setting" and a removable filter. It also is designed for the teen market. Both products require one hour of direct labor for completion. Therefore, total annual direct labor hours are 120,000, (80,000 + 40,000). Expected annual manufacturing overhead is \($441,600\). Thus, the predetermined overhead rate is \($3.68\) per di- rect labor hour. The direct materials cost per unit is \($5.25\) for the hair curler and \($9.75\) for the blow-dryer. The direct labor cost is \($8.00\) per unit for the hair curler and the blow-dryer. Curly-Soo purchases most of the parts from suppliers and assembles the finished product at its Fargo, North Dakota plant. It recently adopted activity-based costing, which after this year-end will totally replace its traditional direct labor-based cost accounting system. Curly-Soo has identified the following six activity cost pools and related cost dri- vers and has assembled the following information.

Instructions
(a) Under traditional product costing, compute the total unit cost of both products. Pre- pare a simple comparative schedule of the individual costs by product (similar to Il- lustration 4-4).
(b) Under ABC, prepare a schedule showing the computations of the activity-based over- head rates (per cost driver).
(c) Prepare e a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Include a computation of overhead cost per unit, rounding to the nearest cent.)
(d) Compute the total cost per until for each product under ABC.
(e) Classify each of the activities as a value-added activity or a nonvalue-added activity.
(f) Comment on (I) the comparative overhead cost per unit For the two products un- der ABC, and (2) the comparative total costs per unit under traditional costing and
ABC.

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Expected Use of Expected Use of Cost Drivers per Product Estimated Activity Cost Pool Cost Driver Overhead Cost Drivers Curlers Dryers Purchasing Orders $ 57,500 500 Receiving Pounds 42,000 168,000 170 70,000 330 98,000 Assembling Parts 169,600 848,000 424,000 424,000 Testing Tests 52,000 130,000 82,000 48,000 Finishing Units 60,000 120,000 80.000 40,000 Packing and shipping Cartons 60,500 12,100 8,040 4,060 $441,600