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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

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Cosgrove Company manufactures two products, Product K-7 and Product L-15.
Product L-15 is of fairly recent origin, having been developed as an attempt to enter a market closely
related to that of Product K-7.
Product L-15 is the more complex of the two products, requiring 2.0 hours of direct labor time per unit to
manufacture compared to 1.0 hour of direct labor time for Product K-7.
Overhead currently is applied to the products on the basis of direct labor hours. The company estimated it
would incur $510,000 in manufacturing overhead costs and produce 10,000 units of Product L-15 and
40,000 units of Product K-7 during the current year.
Unit costs for materials and labor are:
The company is considering the use of activity-based 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-15 using activity-based costing for the allocation of activity
costs.
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