Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:

Mercon

Wurcon

Direct materials cost per unit

$

14.00

$

11.00

Direct labor cost per unit

$

10.00

$

13.00

Direct labor-hours per unit

1.80

9.10

Number of units produced

1,000

2,000

These products are customized to some degree for specific customers.

Required:

1.

The company's manufacturing overhead costs for the year are expected to be $800,000. Using the company's conventional costing system, compute the unit product costs for the two products. (Do not round intermediate calculation. Round your final answers to 2 decimal places.)

Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:

	Mercon	Wurcon	Total
Engineering design time (in hours)	4,000	4,000	8,000

Compute the unit product costs for the two products using the proposed ABC system.