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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

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 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct labor time for Product K-7. Product L-15 is produced on an automated production line. Overhead currently is applied to the products on the basis of direct labor-hours. The company estimated it would incur $1,072,715 in manufacturing overhead costs and produce 15,000 units of Product L-15 and 75,000 units of Product K- 7 during the current year.

Unit costs for materials and labor are:

Product K-7 Product L-15
Direct material $ 18 $ 30
Direct labor $ 11 $ 15

Required:
a-1

Compute the predetermined overhead rate under the current method of allocation and. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

.

Predetermined overhead rate $

a-2

Determine the unit product cost of each product for the current year. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Unit Product Cost
Product K-7 $
Product L-15 $

b.

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:

Total Activity

Activity Cost Pools Total Cost Product K-7 Product L-15 Total
Machine setups required $ 531,570 1,370 2,400 3,770
Purchase orders issued 53,703 508 155 663
Machine-hours required 301,280 7,960 10,870 18,830
Maintenance requests issued 186,162 711 922 1,633
$ 1,072,715

Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Product K-7 Product L-15
Direct materials $ $
Direct labour
Manufacturing overhead
Total unit product cost

$

$

If you could show work so i can understand this, that would be great! Thank you so much in advance!

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