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18 Bahrain Manufacturing produces two types of entry doors: Deluxe and Standard. The company has a single indirect cost pool (manufacturing overhead allocated on the
18 Bahrain Manufacturing produces two types of entry doors: Deluxe and Standard. The company has a single indirect cost pool (manufacturing overhead allocated on the basis of direct manufacturing labor cost). The indirect cost allocation rate has been 400% of direct labor cost. For 2020, Bahrain Company compiled the following data for the two products: 41 41 Sales units Deluxe $50,000 Standard $400.000 41 41 Selling price per unit Direct material costs per unit Direct manufacturing labor per unit $70.00 $30.00 $5.00 $60.00 $20.00 $6.00 Recently, a team with members from design, manufacturing and accounting used an ABC approach to refine its job costing system. The two direct cost categories were retained. The team decided to replace the single indirect cost pool with three indirect cost pools that represent activity areas at the plant. The team obtained the following information: Activity Cost driver otal cost Actual usage of Actual usage of cost driver units cost driver units driver units Deluxe Standard Setups No. of setups $500,000 500 setups 400 setups 100 setups Machine-related $44,000 600 MHS 300 MHS 300 MHs Evember OT Machine hans No. of shipments Packing $5,000 250 shipments 50 shipments 200 shipments Required: 1) Using the current traditional costing system, what is the estimated: a) total cost of manufacturing one unit of Deluxe entry door? (5 Mark) b) profit per unit of Standard? (5 Marks) 2) Using the activity-based costing data presented above, compute the revised manufacturing overhead costs per unit of Delute entry doo
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