Activity-Based Costing and Conventional Costs Compared Hickory Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoa Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the cur- rent month. Charcoal Smoker Gas Cooker 8,000 2,000 Units..... 20 50 Number of batches. 50 90 Number of batch moves.. Direct materials.... Direct labor.... $130,000 $56,000 $70,000 $44,000 Manufacturing overhead follows: Cost Driver Cost Activity Amount of direct materials cost Number of batch moves Materials acquisition and inspection Materials movement Scheduling $68,000 19,600 43,400 Number of batches $131,000 Activity-Based Costing, Customer Profitability, and Activity-Base Chapter 18 E18-23. Activity-Based Costing Versus Conventional Costing Refer to the previous exercise in E18-22 for Hickory Grill. REQUIRED Comment on the differences between the solutions to requirements (a) and (b). Which is more accurate? What errors might managers make if all manufacturing overhead costs are assigned on the basis of direct labor dollars? a. b. Hickory Grill's manufacturing process has become increasingly automated over the past few years. Discuss how this will likely impact its ability to accurately measure product costs. Comment on the adequacy of the preceding data to meet management 's needs. C