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Abbot Corporation produces 200,000,000 units of product X and 80,000,000 of product Y with the following costs and machine hours. Product X Product Y Total

Abbot Corporation produces 200,000,000 units of product X and 80,000,000 of product Y with the following costs and machine hours.

Product X Product Y Total
Direct Cost
(Material Plus Labor) $18,000,000 $8,000,000
Enironmental Support 22,000,000
Nonenvironmental Support 44,000,000 58,000,000
Total Support $44,000,000 $80,000,000 $124,000,000
Total Machine Hours 18,000,000 14,000,000 32,000,000

1. Determine total product cost per unit for each product using a traditional costing system with machine hours as the cost driver. 2. Determine total product cost per unit for each product using an activity based costing system. Use the number of units as the cost driver for each activity.

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