Exercise 2A-2 Activity-Based Absorption Costing as an Alternative to Traditional Product Costing (LO2- 5) Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced Rascon Parcel $ 11.00 $ 7.00 3.10 $ 3.70 .30 17,000 48,000 These products are customized to some degree for specific customers. Required: 1. The company's manufacturing overhead costs for the year are expected to be $459,900. Using the company's traditional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: Engineering design time (in hours) Rascon Parcel 4,100 4,100 Total 8,200 Compute the unit product costs for the two products using the proposed activity-based absorption costing system Complete this question by entering your answers in the tabs below. 2. IvididyememS CONSIEMY del LUVILY-Udstu duSOI PUOI LUSUNY System WHICH III Ole Oveneau woulu connue we allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to distributed as follows during the upcoming year: Rascon Parcel Total Engineering design time (in hours) 4,100 4,100 8,200 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 The company's manufacturing overhead costs for the year are expected to be $459,900. Using the company's traditional costing system, compute the unit product costs for the two products. (Round your intermediate calculations and final answers to 2 decimal places.) Rascon Parcel Unit product cost 2. Ivididyenten IS CONSIDER dll dluVILY-Udstu duSOIPUI LOSuriy System III WIILIT Ildil UI LIIe uvelledu WOULU LUHURUE tu ve allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: Engineering design time (in hours) Rascon Parcel 4,100 4,100 Total 8,209 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Rascon Parcel Unit product cost
