Precor manufactures a line of high-end exercise equipment of commercial quality. Assume that the chief accountant has proposed changing from a traditional costing system to an activity-based costing system. The financial vice president is not convinced, so she requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from Slim-Way Salons, Inc., for 150 low-impact treadmills is received and is identified as the order to be subjected to dual costing. The following cost data relate to the Slim-Way order. (3 Marks)

Data relevant to both costing systems

Direct materials $55,500

Direct labor hours 820

Direct labor rate per hour $ 18.00 Data relevant to the activity-based costing system Compute the total cost of the Slim-Way Salons, Inc. order under the activity based costing system

Find Data relevant to the activity-based costing system Activity Cost Pools Cost Drivers ity-Based Expected Use of Overhead Rate Cost Drivers for readmill Order Engineering design Engineering hours $30 per hour 330 Machine setup Setups $200 per setup 22 Machining Machine hours $25 per hour 732 Assembly Number of subassemblies $8 per 1500 subassembly Packaging and shipping Packaging/shipping hours $15 per hour 152 Building occupancy Machine hours $6 per hour 732 Compute the total cost of the Slim-Way Salons, Inc. order under the activity based costing system Pa N P W O