Exercise $30\mathrm{.}5\mathrm{.}2024$

Aliff Company manufactures two products, Product C and Product D$.$ The company estimated it would incur RM$119,100$ in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor hours. Data concerning the current period's operations appear below:

$\backslash$table$[[,$Product C$,$Product D$],[$Estimated volume,$400$ units,$3,000$ units$],[$Direct labor hours per unit,$1\mathrm{.}20$ hours,$1\mathrm{.}30$ hours$],[$Direct materials cost per unit,RM$4\mathrm{.}00,$RM$22\mathrm{.}80],[$Direct labor cost per unit,RM$12\mathrm{.}00,$RM$13\mathrm{.}00]]$

Required:

a$.$ Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year.

b$.$ The company is considering using an activity$-$based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor hours. The activity$-$based costing system would use three activity cost pools. Data relating to these activities for the current period are given below:

$\backslash$table$[[,,,$Expected Activity$],[$Activity Cost Pool,Estimated Overhead Costs,Product C$,$Product D$,$Total$],[$Machine setups,RM $10,440,60,120,180],[$Purchase orders,$78,000,820,1,180,2,000],[$General factory,$30,660,480,3,900,4,380],[$Total$,RM119,{100}_{?},,,]]$

Determine the unit product cost of each product for the current period using the activity$-$based costing approach.