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Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. Rosman,
Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products.
Rosman, Inc., manufactures and sells two products: Product Q1 and Product G2. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Direct Labor- Total Direct Production Hours Per Labor-Hours Unit Product Q1 Product G2 Total direct labor-hours 600 700 12.0 9.0 3,600 3,000 6,600 The direct labor rate is $26.80 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $288.60 $181.80 Product Q1 Product G2 The company is considering adopting an activity-based costing system with the following activity cost pools activity measures, and expected activity: Estimated Expected Activity Activity Cost Activity Measures Overhead Cost Product Q1 Product G2 Total Pools Labor-related DLHs Product testing Tests General factory MHs $102,156 75,608 399,000 3,600 1,050 5,400 3,000 1,400 4,800 6,600 2,450 10,200 $576,764Step by Step Solution
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