Comparing Two Products under Traditional and Activity-Based Costing Compare two projects under development by the same...
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Comparing Two Products under Traditional and Activity-Based Costing Compare two projects under development by the same company. The following are a few aspects of each product's development process relevant to costs. Product S Requires 3,680 hours of testing Requires 4,830 units of computing power Requires 25 developer hours to implement Product T Requires 920 hours of testing Requires 2,070 units of computing power Requires 75 developer hours to implement Cost Items Testing: Computing power: Cost of Each Activity $27,600 $41,400 Developer hourly cost: $12 per hour Traditional Costing Traditional costing would take the proportion of a direct cost, such as direct labor hours, and use it as the basis for allocating overhead costs, such as computing power and testing. In the following table, use developer hours as the basis for assigning overhead costs (computing and developer costs) to each project. If required, round your answers to the nearest dollar. Product S Product T Percentage of developer hours 25% Percentage of developer hours 75% Testing cost $ Testing cost $ Computing cost $ Computing cost $ Developer cost $ Developer cost Total cost Total cost Comparing Two Products under Traditional and Activity-Based Costing Compare two projects under development by the same company. The following are a few aspects of each product's development process relevant to costs. Product S Requires 3,680 hours of testing Requires 4,830 units of computing power Requires 25 developer hours to implement Product T Requires 920 hours of testing Requires 2,070 units of computing power Requires 75 developer hours to implement Cost Items Testing: Computing power: Cost of Each Activity $27,600 $41,400 Developer hourly cost: $12 per hour Traditional Costing Traditional costing would take the proportion of a direct cost, such as direct labor hours, and use it as the basis for allocating overhead costs, such as computing power and testing. In the following table, use developer hours as the basis for assigning overhead costs (computing and developer costs) to each project. If required, round your answers to the nearest dollar. Product S Product T Percentage of developer hours 25% Percentage of developer hours 75% Testing cost $ Testing cost $ Computing cost $ Computing cost $ Developer cost $ Developer cost Total cost Total cost
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