2 3 4 3 6 Welk Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labour-bours (DI.Hs). The company has two products, H16Z and P25P. The following data applies to these two products: Direct materials cost per unit Direct labour cost per unit Total direct labour hours expected to be used Number of units expected to be produced H16Z P25P $10.20 $50.50 58.40 $25.20 12,000 30,000 12,000 10,000 W 9 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: 10 11 Expected Activity 12 Expected Activity Cost Pool Activity measure Overhead 13 Cost 1167 P25P Total 14 Supporting direct labour 5 Setting up machines Parts administration Total Chapter formulas Direct labour hours $552.000 12,000 12.000 24,000 Setups $132,480 864 240 1.104 Part types $780,000 600 960 1,560 $1,464,480 C D E F G 23 Required: 24 25 Part 1: Calculate the predetermined overhead rate based on direct labour hours and calculate the overhead cost per unit for each product. (3 marks) 26 27 8 Predetermined overhead rate Overhead cost per unit H16Z P25P Part 2: Calculate the overhead cost per unit for each product using activity-based costing. (7 marks) Activity Cost Pool Supporting direct labour Setting up machines Parts administration Overhead cost per unit