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209. Besser, Inc., manufactures and sells two products: Product D0 and Product S3. Data concerning the expected production of each product and the Expected Production

209.

Besser, Inc., manufactures and sells two products: Product D0 and Product S3. Data concerning the expected production of each product and the

Expected Production

Direct Labor-Hours Per Unit

Total Direct Labor-Hours

Product D0

800

5.0

4,000

Product S3

100

8.0

800

Total direct labor-hours

4,800

The direct labor rate is $24.70 per DLH. The direct materials cost per unit for each product is given below:

Direct Materials Cost per Unit

Product D0

$136.60

Product S3

$162.60

The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Estimated

Expected Activity

Activity Cost Pools

Activity Measures

Overhead Cost

Product D0

Product S3

Total

Labor-related

DLHs

$187,104

4,000

800

4,800

Production orders

Orders

56,590

400

600

1,000

General factory

MHs

339,560

3,400

3,100

6,500

$583,254

Required: In all computations involving dollars in the following requirements, round off your answer to the nearest whole cent. a. The company currently uses a traditional costing method in which overhead is applied to products based solely on direct labor-hours. Compute the company's predetermined overhead rate under this costing method. b. How much overhead would be applied to each product under the company's traditional costing method? c. Determine the unit product cost of each product under the company's traditional costing method. d. Compute the activity rates under the activity-based costing system. e. Determine how much overhead would be assigned to each product under the activity-based costing system. f. Determine the unit product cost of each product under the activity-based costing method. g. What is the difference between the overhead per unit under the traditional costing method and the activity-based costing system for each of the two products? h. What is the difference between the unit product costs under the under the traditional costing method and the activity-based costing system for each of the two products?

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