8) A company needs an analysis to determine whether they should continue to use traditional overhead allocation or activity-based costing. The company uses common machinery to manufacture two simple products. Each year, there are two production runs for each product requiring similar setup effort. Manufacturing overhead includes setup cost of $50,400 per year. Total overhead for the company, including the setup cost, is $198,000 annually and direct labor hours are expected to total 18,000 for the year. The following information is available for products A and B: Units produced Direct material cost per unit Direct labor cost per unit Machine hours per unit Direct labor hours per unit Product A 1,000 $14 $24 1 Product B 8,000 $14 $24 1 2 2 Required: a. Using the format in the video calculate the cost per unit for each product using traditional overhead allocation. b. Using the format in the video calculate the cost per unit for each product using activity- based costing, Please use direct labor hours for the "Other overhead" allocation pool. Present Value of an Annuity of $1 Table: TABLE B-2 PRESENT VALUE OF AN ANNUITY OF 1 PV = (+ on (n) Periods 2% 24% 3% 5% 6% 7% 8% 9% I 11% 10% 12% 15% 0.94340 1 2 3 4 5 0.98039 194156 288388 380773 471346 0.97561 1.92742 2.85602 3.76197 464583 097087 191347 282861 3.71710 457971 0.96154 188609 2.77509 362990 4.45182 0.95238 1.85941 2.72325 3.54595 432948 185339 267301 3.46511 421236 0.93458 180802 2.62132 3.38721 4.10020 0.92593 1.78326 257710 3.31213 3.98271 0.97743 1.75911 253129 323972 3.88965 0.90909 173554 249685 3.16987 3.79079 0.90090 171252 244371 3.10245 3.69590 0.89286 1.69005 240183 3.03735 3.60478 0.86957 162571 228323 285498 335216 6 7 8 9 10 550103 647199 732568 8.16224 898259 5.50813 6.34939 7.17014 7.97087 B.75206 5.41719 623028 701969 7.78611 8.53020 524214 6.00205 6:73274 743533 8.11090 5.07569 5.78637 6.46321 7.10782 7.72173 491732 558238 620979 680169 738009 5.38929 5.97130 6.51523 7.02358 462288 520637 5.74564 629689 671009 4.48592 5.03295 553482 5.99525 6.41766 435526 485842 533493 5.75902 6.14457 423054 471220 514612 5.53705 589923 4.11141 456376 4.96754 5.32825 5.65022 3.78448 4.16042 4.48732 477158 501877 11 12 13 14 9.78685 9.51421 925262 10.57534 1025776 995400 1131837 10.983191063496 12.10525 11.69091 1123607 12.4926 12.38738 11.93794 8.76018 938507 9.98565 1056312 11.11839 8.30641 8.86325 9.39357 9.89864 10.37966 789687 838394 885258 929498 971225 7.49667 7.94269 8.35765 8.74547 9.10791 7.13896 753608 790378 8.24424 8.55948 6.80519 7.16073 748690 2.78615 8.06069 6.49506 681369 7.10336 736669 750608 620652 6.49236 6.744987 6.98187 7.19087 5.93770 6.19437 6.42355 6.62817 6.8106 5.23371 5.42062 558315 5.72448 5.84737 15
