BRILLANT ACCENT COMPANY Number of Units Per Batch 1,000 1000 1000 BRASS CHROME WHITE Projected Sales in Units 30,000 50,000 40,000 PER UNIT DATA Selling price $ 40 $ 20 $ 30 $ 8 oo $ $ 4 3 $ $ $ 9 Direct materials Direct labor Overhead cost based on direct labor hours (traditional costing system) $ 12 $ 3 $ 9 Hours per 1,000 unit batch: Direct labor hours Machine hours Setup hours Inspection hours 45 20 1 30 10 25 0.5 20 30 10 1 20 Activity Overhead Costs Activity Levels Direct labor hours Machine hours Setup hours Inspection hours 2,900 2,400 95 2,700 PART A: Using a traditional costing system determine the gross profit per unit of each facuet. BRASS CHROME WHITE PER UNIT Gross profit PART B: Determine the activity-cost-driver-rate for setup and inspection costs. Activity OH Cost Activity Levels Activity Rate Setups Inspection PART C: Using an ABC System, for each style of facuet determine: 1.) estimated overhead cost per unit and 2.) estimated gross profit per unit. BRASS CHROME WHITE Overhead cost - setup Activity Rate Activity Level Number of Batches Cost Per Unit Overhead cost - inspection Activity Rate Activity Level Number of Batches Cost Per Unit Overhead cost - setup Overhead cost - inspection Gross profit PART D: Explain the differences between the profits obtained from the traditional system and the ABC system. Which system provides a better estimate of profitability? Why