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04. (30%) Luzent Company produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For
04. (30%) Luzent Company produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2018, Luzent compiled the following data for the two products: Sales units Sales price per unit Direct materials cost per unit Direct labor costs per unit Deluxe 50,000 $650.00 $95.00 $75.00 Standard 400,000 $475.00 $75.00 $55.00 Last year, Luzent Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2018: Activity Cost Driver Cost Total Deluxe Standard Setups of setups $ 500,000 500 400 100 Machine-related of machine hours$44,000,000 600,000 300,000 300,000 Packing of shipments $5,000,000 250,000 150,000 100,000 Required: Using the activity-based costing data presented above 1. Compute the cost driver rate for each overhead activity 2. Compute the total cost to manufacture one unit of Deluxe and Standard type of products
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