Exercise 5-7A Comparing an ABC system with a traditional costing system LO 5-1, 5-3 Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Cost Pool Total $136,800 143, 200 Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Cost Driver Number of units produced Number of programming hours Number of inspections Number of tests 27,000 31,000 Total overhead cost $338,000 Expected activity for each product follows: Number of TTTT Programming Number of Units Number of Number of Inspections 456 144 Hours Tests Decoder P 17,100 39,900 2, 200 1, 800 2,800 2, 200 Decoder Q 57,000 60 Total 4,000 5,000 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: Direct Labor Hours Decoder P Decoder Q 7,800 18, 200 Total 26,000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base (Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole dollar amount.) Allocated Cost Decoder P Decoder Q Total Required A Required B Required B Required A Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. (Round intermediate calculations and final answers to 2 decimal places.) Cost per unit Decoder Q Method Decoder P Labor hours Required A Required B