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Exercise 5-7A (Algo) Comparing an ABC system with a traditional costing system LO 5-1, 5-3 Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Cost Pool Activity Pools Total Repair and maintenance on assembly machine $ 104,500 Programming cost 143,500 Software inspections 14,000 Product testing 18,000 Total overhead cost $ 280,000 Cost Driver Number of units produced Number of programming hours Number of inspections Number of tests Expected activity for each product follows: Decoder P Decoder o Total Number of Units 16,500 38,500 55,000 Number of Programming Hours 1,500 1,000 2,500 Number of Inspections 304 96 400 Number of Tests 2,240 1,760 4,000 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: Decoder P Decoder Q Total Direct Labor Hours 6,000 14,000 20,000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. (Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole dollar amount.) Allocated Cost Decoder P Decoder Q Total Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Complete this question by entering your answers in the tabs below. Required A Required B Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. (Round intermediate calculations and final answers to 2 decimal places.) Cost per unit Method Decoder P Decoder Q ABC Labor hours