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opog ucl labor (airect labor-hours) ..$200,000 10,00o 40.000 50,000 30 100 0,000 70 100 setups) 75,000 50,000 ...$325,000 200 40,000 200 100300 Safety testing (tests)

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opog ucl labor (airect labor-hours) ..$200,000 10,00o 40.000 50,000 30 100 0,000 70 100 setups) 75,000 50,000 ...$325,000 200 40,000 200 100300 Safety testing (tests) Total manufacturing overhead cost . . . . . . . . Deternine the unit product costs of the Deluxe and Standard products under the activity absorption costing system. -based PROBLEM 3A-4 Activity-Based Absorption Costing as an Alternative to Traditional Product Costing L03-8 Ellix Company manufactures two models of ultra-high fidelity speakers, the X99 model. Data regarding the two products follow: X200 model and the Total Direct Production Labor-Hours 1.8 DLHs per unit 5,000 units 9,000 DLHs 27.000 DLHs 36,000 DLHs Direct Labor-Hours Annual Product X200 X99 .. 0.9 DLHs per unit 30,000 units Additional information about the company follows: a. Model X200 requires $72 in direct materials per unit, and model X99 requires S50. b. The direct labor rate is $10 per hour. e. The company has always used direct labor-hours as the base for applying manufacturing over head cost to products. Model X200 is more complex to manufacture than model X99 and requires the use of special equipment. Because of the special work required in (d) above, the company is considering the use of activity-based absorption costing to apply manufacturing overhead cost to products. Three activity cost pools have been identified as follows: d. e. EstimatedEstimated Total Activity Activity Cost Pool Machine setups Special processing General factory Activity Measure Total Cost X200 X99 Total Number of setups S 360,000 50 100 150 180,000 12,000 setups ...N Machine-hours Direct labor-hours 1,260,000 9,000 27,000 36,000 0 12,000 $1,800,000

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