companies manfacturing overhead costs for the year are 540,000

compute unit product costs for the two products

unit product costs. RASCON. PARCEL

COMPUTE UNIT PRODUCT COST FOR THE TWO USING PROPOSED ACTIVITY BASED ABSORBTION COSTUNG SYSTEM

unit product costs RASCON. PARCEL

Exercise 2A-2 Activity-Based Absorption Costing as an Alternative to Traditional Product Costing (LO2. 5) Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Direct naterials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced Rascon Parcel $ 14.00 $ 5.00 $ 3.10 $ 3.80 .30 .35 16,000 48,000 These products are customized to some degree for specific customers. Required: 1. The company's manufacturing overhead costs for the year are expected to be $540,000. Using the company's traditional costing system, compute the unit product costs for the two products. 2. Management is considering an activity based absorption costing system in which half of the overhead would continue to be allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year Rascon Parcel Total Engineering design tine (in hours) 4,500 4,500 9,000 Compute the unit product costs for the two products using the proposed activity-based absorption costing system Complete this question by entering your answers in the tabs below. Required: 1. The company's manufacturing overhead costs for the year are expected to be $540,000. Using the company's traditional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: 5 Engineering design time (in hours) Rascon Parcel Total 4,500 4,500 9,000 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Rascon Parcel Unit product cost