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Woodland Industries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $18 per hour and that there were no beginning inventories. The following information was available for 2016, based on an expected production level of 52,100 units for the year, which will require 226,000 direct labor hours: Budgeted Costs for 2016 $ 38,420 2,583,180 4,294,000 Activity Cost Driver Materials handling Cutting and lathe work Assembly and inspection Cost Driver Used as Allocation Base Number of parts used Number of parts used Direct labor hours Cost Allocation Rate $ 0.17 per part 11.43 per part 19.00 per hour The following production, costs, and activities occurred during the month of July: Units Produced 3,200 Direct Materials Costs $102,700 Number of Parts Used 1,081 Direct Labor Hours 13,500 Required: a. Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of July (using the activitybased costing approach). (Round "Cost per unit produced" to 2 decimal places.) Total manufacturing cost Cost per unit produced b. Assume instead that Woodland Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activitybased costing system previously described). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of July. (Hint: You will need to calculate the predetermined overhead application rate using the total budgeted overhead costs for 2016.) (Round "Cost per unit produced" to 2 decimal places.) Total manufacturing cost Cost per unit produced c. Which approach do you think provides better information for manufacturing managers? Activity based costing Direct labor hours basis References Worksheet Check my work eBook & Resources Difficulty: 2 Medium Learning Objective: 13-09 Perform activity-based costing and describe activity-based management