Lauder Company manufactures and distributes various fixtures used primarily in new building construction. At the

company's Bayside plant, Lauder produces two models of one widely used fixture designated by model names LC$-20$ and

LC$-50.$ Currently, the Bayside plant uses direct labor$-$hours to allocate manufacturing overhead costs to products.

The vice president$-$manufacturing $($VP$-$M$)$ at Lauder has recently been considering updates to the company's costing

systems as a way to ensure that managers had the best information available for decision making. However, rather than

update throughout the entire firm, the VP$-$M and CFO agreed to test an ABC system. Because of its size and focus, the

Bayside plant was selected for the experiment. An ABC study team, consisting of both plant and corporate employees

was formed to propose an ABC system and compare the product costs with those reported by the current system. Based

on the experiment, the executives at Lauder will decide whether to roll out the new cost system to the entire company.

The study team identified four cost pools into which the manufacturing overhead costs could be grouped. There was a

great deal of discussion about both the pools and the cost drivers. The final system selected consisted of the following

pools and drivers. The costs were based on the forecasts for the coming year.

Costs

$ $522,720$

$2,917,200$

$1,042,800$

$554,400$

Activity Drivers

Direct material cost

Machine$-$hours

Production runs

Units shipped

LC$-20$

Total direct material costs

Total direct labor costs

Total machine$-$hours

Total number of production runs

Number of units produced and shipped

Cost Pools

Material inspection

Assembly

Equipment setup

Packaging and shipping

Data for production of the two products at the Bayside plant for the coming year of operations follows:

Products

$ $712,800$

$ $554,400$

$121,605$

$99$

$316,800$

All direct labor at the Bayside plant is paid $$35$ per hour.

LC$-50$

$ $237,600$

$ $277,200$

$60,720$

$66$

$79,200$

Required:

a$.$ What unit product costs will be reported for the two products in the coming year if the current cost system continues to be used?

o$.$ What unit product costs will be reported for the two products if the ABC system is used?

Required A

What unit product costs will be reported for the two products in the coming year if the current cost system continues to be

used?

Note: Do not round intermediate calculations.

LC$-20$

Required B

LC$-50$

Direct labor$-$hours

Direct material costs

Direct labor cost

Overhead

Total costs

Number of units

Unit cost

$15,840$

$712,800$

$7,920$

$237,600$

$712,800$

$237,600$

$0$