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 $ 15.00 $ 2.60 50 17.pee Parcel $ 8.00 $ 3.60 .55 49,800 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 $921,700. 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: Rascon Parcel 4,600 4,600 Engineering design time (in hours) Total 9,280 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. 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: Total Engineering design time (in hours) Rascon 4,600 Parcel 4,600 9,200 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 $921,700. 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 Required 2 > 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 $921,700. 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 4,600 4,600 Total 9,200 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 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
