PART 1 - DEVELOPMENT QUESTIONS (...../60) XYZ Company produces two all-purpose Bluetooth adaptor devices: BM: A high volume item with sales totaling 80,000 per year. QC A low volume item with sales totaling 20,000 per year. Each product requires 1 hour of direct labor. Total annual direct labor hours (DLH) 100,000 (80,000+ 20,000). Direct labor cost $10 per unit for each product. Expected annual manufacturing overhead costs $3,000,000 Direct materials cost: The BM-S14 per unit. The QC - $18 per unit. EXPECTED COST OF DRIVE PER ACTIVITY Expected Use of Cost Drivers per Product Activity Cost Pools Overhead Por Activity BM QC Setting up machines $1,200,000 25,000 Setups 7,000 13,000 Machining S1,500,000 $5,000 machine hr 20.000 40.000 Inspecting $800,000 5,000 inspections 2.000 3.000 Total $3.500.000 Elements of Competency Determine cost of operations. Perform financial task of an operation supply: Produce financial reports, QUESTIONS 1. Calculate overhead and total manufacturing cost as per Traditional Cost. (10 points) 2. Calculate overhead and total manufacturing cost as per Activity Based Cost (15 points) 3. Compare your finding of Activity Based Cost overhead with Traditional Cost overhead. (5 points) 4. Make a brief comment about why Activity Based Cost overhead differs from Traditional Cost overhead. (5 points)