Koszyk Manufacturing Corporation has a traditional costing system in which it allocates manufacturing overhead to its products using a budgeted overhead rate based on direct labor-hours (DLHs). The company has two products, P85G and C43S, about which it has provided the following data:

P85G C43S

Direct materials per unit $36.50 $63.10

Direct labor per unit $20.80 $31.20

Direct labor-hours per unit 0.80 1.20

Annual production 35,000 10,000

The companys estimated total manufacturing overhead for the year is $2,264,000 and the companys estimated total direct labor-hours for the year is 40,000.

The company is considering switching to an activity-based costing system. Data for this proposed activity-based costing system appear below:

Estimated

Activities and Activity Cost Drivers Overhead Cost

Assembling products (DLHs) $1,160,000

Setting up machines (setups) . 288,000

Parts administration (part types) 816,000

Total $2,264,000

Expected Activity

P85G C43S

DLHs . 28,000 12,000

Setups 1,480 920

Part types 1,880 840

7. The manufacturing overhead that would be allocated to a unit of product C43S under the traditional costing system is closestto:

a. $29.00

b. $96.67

c. $67.92

d. $56.60

e. $188.67

8. The manufacturing overhead that would be allocated to a unit of product C43S under the activity-based costing system is closest to:

a. $71.04

b. $50.31

c. $50.60

d. $15.79

e. $44.39