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How do you find the following data: Comparing Two Products under Traditional and Activity-Based Costing Compare two projects under development by the same company. The
How do you find the following data:
Comparing Two Products under Traditional and Activity-Based Costing Compare two projects under development by the same company. The following are a few aspects of each product's development process relevant to costs. Product S Product T Requires 3,200 hours of testing Requires 800 hours of testing Requires 5,110 units of computing power Requires 2,190 units of computing power Requires 25 developer hours to implement Requires 75 developer hours to implement Cost Items Cost of Each Activity Testing: $29,200 Computing power: $43,800 Developer hourly cost: $14 per hour Traditional Costing Traditional costing would take the proportion of a direct cost, such as direct labor hours, and use it as the basis for allocating overhead costs, such as computing power and testing. In the following table, use developer hours as the basis for assigning overhead costs (computing and developer costs) to each project. If required, round your answers to the nearest dollar. Product S Percentage of developer hours 25% Testing cost $- \\/ Product T Percentage of developer hours 75% Computing cost $-" Testing cost $- v/ Developer cost $-" $-~' Computing cost Total cost $ 18,600 J Developer cost $-~' Total cost $ 55,800 v/ Activity-Based Costing Using the data above for products S and T, calculate the costs using activitybased costing. Allocate the costs of testing, computing, and development based on the rates of activity consumed by each product's development process. If required in your computations, round per unit costs to the nearest cent. Round your nal answers to the nearest dollar. Cost Activity Base Testing Hours of testing Computing cost Units of computing power Developer cost Development hours Product 5 Product T Testing cost X Testing cost Computing cost Computing cost Developer cost Developer cost DUB! DUDE Total cost Total cost Feedback V 7 Check MyWork The budgeted activity costs are assigned to products using factory overhead rates for each activity. These rates are called activity rates because they are related to activities. Activity rates are determined as follows: Activity Rate = Budgeted Activity Cost / Total Activity Base Usage The costs are allocated to the product by multiplying the activity-base usage by the computed activity rateStep by Step Solution
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