Bustle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Z68W and K07E, about which it has provided the following data:

Z68W K07E

Direct materials per unit $14.90 $44.30

Direct Labor per unit 4.20 25.20

Direct Labor-hours per unit 0.20 1.20

Annual Production 40,000 15,000

The company's estimated total manufacturing overhead for the year is $1,809,600 and the company's estimated total direct labor-hours for the year is 26,000.

The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:

Activities and Activity Measures Estimated Overhead Cost

Assembling Products (DLHs) $ 702,000

Preparing Products (DLHs) 132,600

Milling (MHs) 975,000

Total $1,809,000

Activities Z68W K07E Total

Assembling products 8,000 18,000 26,000

Preparing Batches 884 442 1,326

Milling 702 1,248 1,950

Required:

a. Determine the unit product cost of each of the company's two products under the traditional costing system. b. Determine the unit product cost of each of the company's two products under activity- based costing system.