Problem 5-14A (Algo) Comparing an ABC system with a traditional costing system LO 5-1, 5-2, 5-3

Perez Electronics produces video games in three market categories: commercial, home, and miniature. Perez has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers:

Category Unit Total Pooled Cost $ 721,600 Batch 443,500 Types of Costs Cost Driver Indirect labor wages, supplies, factory utilities, machine Machine hours maintenance Materials handling, inventory storage, labor for Number of production orders setups, packaging, labeling and shipping, scheduling Research and development Time spent by research department Rent, general utilities, maintenance, facility depreciation, Square footage admin. salaries Product Facility 210,400 495,600 Additional data for each of the product lines follow: Total Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage Commercial $ 36.20/unit $ 13.40/hour 5,900 12,000 260 14% 11,000 18,000 Home $ 23.80/unit $ 13.40/hour 11,100 43,000 2,200 23% 44,000 51,000 Miniature $ 29.90/unit $ 18.30/hour 1,900 27,000 640 63% 10,000 15,000 18,900 82,000 3,100 100% 65,000 84,000 Required a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines. (For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole dollar amount.) Answer is complete but not entirely correct. a. Type of Product Commercial Home $ Miniature Combined total $ Total Cost Cost per Unit 1,061,360$ 96.49 2,294,840 52.16 521,870 52.19 3,878,070 755,836 X $ 68.71 2,238,462 X 50.88 884,572 X 88.45 X 3,878,870 b. $ Commercial Home Miniature Combined total $