PAPRTII: SOLVING PROBLEMS 10marks) Q1 (6marks) Luzent Company produces two types of entry doors: Premium (PI) and Basic (B5). The assignment basis for support costs has been direct labor dollars. For 2015, Luzent compiled the following data for the two products: Premium 50,000 Basic 400,000 $15 $11 Sales units Direct material used per unit Direct material price per unit Direct labor hours per unit Direct labor rate per hour 10 $9.5 7.5 $10 Total estimated overhead for the period is $49,500,000 Last year, Luzent Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2015: Cost Driver of setups Cost Total Premium Basic $ 500,000 500 400 100 Activity Setups Machine-related of machine hours $44,000,000 600,000 300,000 300,000 Packing of shipments $ 5,000,000 250,000 50,000 200,000 Required: a. Calculate the unit cost for a Premium and Basic using the traditional system based on a single plantwide overhead rate (use direct labor hours as the cost driver). te the unit cost for a Premium and Basic using the activity-based costing system