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Delicious Led manufactures custom made chocolate bars for special occassions such as weddings, graduations etc. In 2019 the company had two types of products on

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Delicious Led manufactures custom made "chocolate bars" for special occassions such as weddings, graduations etc. In 2019 the company had two types of products on the market, the "Longchoc" which sells for $230 and the "Minichoc" which sells for $210. The company currently uses a traditional costing system and allocates overhead costs based on an estimated 80,000 direct labour hours. The following cost information has been used as a basis for pricing decisions over the past year. Per-unit data Longchoc Minichoc Direct labour hours 15 Direct labour cost per hour $13 $14 Direct materials $85 $40 Number of units produced 35,000 25,000 The new company Management Accountant is considering the use of Activity Based Costing to apply overhead and has collected the following data: Number of Events Traceable Activity centre Cost driver Longchoc Minichoc costs $ Mixing Mixing hours $100,000 100 100 Design Design hours $364,000 800 200 Assembly of Chocolate Bar No of orders $900,000 20,000 30,000 Moulding Shaping Number of orders $300,000 9,000 1,000 Total manufacturing $1,664,000 overhead costs Required: (where necessary round off answer to 2 decimal places) a) Using the traditional costing system, calculate the company's predetermined overhead rate. b) Calculate the total product cost per unit for each product using the traditional overhead allocation rate calculated in part (a) above. :) Calculate the overhead activity rate for each activity centre using the Activity Based Costing (ABC) approach. d) Using an Activity Based Costing (ABC) approach, calculate the total product costs of one unit of Longchoc and one unit of Minichoc. e) Calculate the operating profit per unit for Longchoc and Minichoc under, the 1. A traditional costing system and 2. The ABC system

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