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Cabalo Company manufactures two products, Product C and Product D. The company estimated it would incur $395,600 in manufacturing overhead costs during the current period.
Cabalo Company manufactures two products, Product C and Product D. The company estimated it would incur $395,600 in manufacturing overhead costs during the current period. Overhead currently is assigned to the products on the basis of direct labor hours. Data concerning the current period?s operations appear below: (10 pts.)
Product C Product D
Estimated volume 4000 units 12,000 units
Direct labor hours per unit .70 hour 1.2 hours
Direct materials cost per unit $10.70 $16.70
Direct labor cost per unit $11.20 $19.20
The company is considering using an activity-based costing system to compute unit product costs instead of its traditional system based on direct labor hours. The activity-based costing system would use three activity centers. Data relating to these activities for the current period are given below: Determine the unit product cost of each product for the current period using the activity-based costing approach. Direct materials and direct labor cost per unit are the same as in item (a) above. Product cost using activity-based costing: Product CStep by Step Solution
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