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b. Determine the unit product cost of each of the company's two products under activity-based costing system. (10 marks) Unit product Unit product cost Lu85

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b. Determine the unit product cost of each of the company's two products under activity-based costing system. (10 marks) Unit product Unit product cost Lu85 Cost W 8212 2 =$352, 000/ 9,000 = 53 52, 000/ 13, 000 = $39. 11 per direct labour hour erapplied $27, 08 Per direct labour hour $ 201, 960 / 814 $ 201, 460 = 374 Income $ 248. 11 per machine setup. - $640 per machine setup $968,100: 924 5968,000 : 1,012 = $1, 047. 62 per part types = $956.52 per part types96 option command command option Problem 1 (15 marks) Tamir 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-hours (DLHs). The company has two products, W82R and L48S, about which it has provided the following data: W82R L48S Direct Material per unit $ 11.50 $ 62.90 Direct Labour per unit S 2.00 $ 1 Direct labour hours per unit 0.20 1.30 Annual production 45,000 10,000 The company's estimated total manufacturing overhead for the year is $1,521,960 and the company's estimated total direct labour-hours for the year is 12,000. The company is considering using activity-based costing to determine its unit product costs. Data for this proposed activity-based costing system appear below: Activities and Drivers Estimated OH cost Supporting direct labour (DLH) S 352,000 Setting up machines (setups) 201,960 Parts Administration (part types) 968,000 Total: 1,521,960 Activities W82R L48S Total Supporting direct labour (DLH) 9,000 13,000 22,000 Setting up machines (setups) 814 374 1,188 Parts Administration (part types) 924 1,012 1,936 Required: a. Determine the unit product cost of each of the company's two products under the traditional costing system. (5 marks) Predtermined OH Rate= 81, 5 21 , 96 0 121000 Unit product cost w820= 45, 000 4 (11.50 + 7.0) $ 126. 83 per = $3, 33 3. 3 3 2 direct labour hows Unit Product cost 1 483 = 10,600 / ($62. 90 + $ 13.00) = $131.75

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