Course Title:Cost and Management Accounting

Read the questions carefully and answer accordingly.

I. Bilals Pet Supply Corporation manufactures two models of grooming stations, a standard and a deluxe model. The following activity and cost information has been compiled:

Number of Number of Number of Product Setups Components Direct Labor Hours Standard 3 30 650 Deluxe 7 50 150

Overhead costs $40,000 $120,000

Assume a traditional costing system applies the $160,000 of overhead costs based on direct labor hours. a) Answered already - Don't Answer) b) (Answered already - Don't Answer)

Assume an activity-based costing system is used and that the number of setups and the number of components are identified as the activity-cost drivers for overhead.

c) (Answered already - Don't Answer)

d) (Answered already - Don't Answer)

e) Explain the difference between the costs obtained from the traditional costing system and the ABC system. Which system provides a better estimate of costs? Why? (4Marks)