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Cosgrove Company manufactures two products, Product K - 7 and Product L - 1 5 . Product L - 1 5 is of fairly recent
Cosgrove Company manufactures two products, Product K and Product L
Product L is of fairly recent origin, having been developed as an attempt to enter a market closely
related to that of Product K
Product is the more complex of the two products, requiring hours of direct labor time per unit to
manufacture compared to hour of direct labor time for Product K
Overhead currently is applied to the products on the basis of direct labor hours. The company estimated it
would incur $ in manufacturing overhead costs and produce units of Product L and
units of Product K during the current year.
Unit costs for materials and labor are:
The company is considering the use of activitybased costing as an alternative to its traditional costing
method for manufacturing overhead. Data relating to the company's activity cost pools for the current year
are given below:
Compute total cost per unit for Product L using activitybased costing for the allocation of activity
costs.
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