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Kuechle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct
Kuechle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 149L and B26W, about which it has provided the following data Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production 149L $17.80 $16.10 0.70 30,000 B26W $55 40 $55 20 2.40 15,000 The company's estimated total manufacturing overhead for the year is $1,793,790 and the company's estimated total direct labor-hours for the year is 57,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below Activities and Activity Measures Supporting direct labor (DLHs) Setting up machines (setups) Parts administration (part types) Estimated overhead Cost $ 285.000 437,190 1,071,600 ITotal $1,793,790 Activities Supporting direct labor Setting up machines Parts administration 149L 21,000 798 1,539 B26W 36,000 2,565 1,140 Total 57.000 3,3631 2,679) Required (Round to 2 decimal places) a Determine the unit product cost of each of the company's two products under the traditional costing system. 149L: S. B26W: $ b. Determine the unit product cost of each of the company's two products under an activity-based costing system. 149L: $ B26W: S
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