MQ6

s.mheducation MGMT8500 - Midterm Exam Saved 6 Harrison Company makes two products and uses a conventional costing system in which a single plantwide, predetermined overhead rate is computed based on direct labour-hours. These products are customized to some degree for specific customers. Data for the two products for the upcoming year follow. 10 points Direct materials cost per unit Direct labour cost per unit Direct labour-hours per unit Number of units produced Rascon Parcel $ 29.30 $ 23.00 $ 21.60 $ 4.40 0.90 0.40 32,000 118,000 & 02:41:17 Required: 1. The company's manufacturing overhead costs for the year are expected to be $860,000. Using the company's traditional costing system, compute the unit product costs for the two products. (Do not round Intermedlate calculations and round your final answers to 2 decimal places.) Rascon Parcel Unit product cost 2. Management is considering an ABC system in which half of the overhead would continue to be allocated on the basis of direct labour-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. Engineering design time (in hours) Rascon 5,400 Parcel 2,700 Total 8,198 Compute the unit product costs for the two products using the proposed ABC system. (Do not round Intermediate calculatlons and round your final answers to 2 decimal places.) Rascon Parcel Unit product cost