Question
Pryad Corporation makes ultra-lightweight backpacking tents. Data concerning the company's two product lines appear below: Deluxe Standard Direct materials per unit $ 73 $ 46
Pryad Corporation makes ultra-lightweight backpacking tents. Data concerning the company's two product lines appear below: |
Deluxe | Standard | |||||
Direct materials per unit | $ | 73 | $ | 46 | ||
Direct labor per unit | $ | 13.00 | $ | 9.00 | ||
Direct labor-hours per unit | .50 | DLHs | 0.50 | DLHs | ||
Estimated annual production | 22,000 | units | 76,000 | units | ||
The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: |
Estimated total manufacturing overhead | $303,800 | |
Estimated total direct labor-hours | 49,000 | DLHs |
Required: | |
1. | Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.) |
Deluxe | Standard | |
Unit product cost | $ | $ |
2. | The company is considering replacing its traditional costing system for determining unit product costs for external reports with an activity-based costing system. The activity-based costing system would have the following three activity cost pools: |
Expected Activity | |||||
Activities and Activity Measures | Estimated Overhead Cost | Deluxe | Standard | Total | |
Supporting direct labor (direct labor-hours) | $ | 171,500 | 11,000 | 38,000 | 49,000 |
Batch setups (setups) | 61,600 | 180 | 100 | 280 | |
Safety testing (tests) | 70,700 | 24 | 76 | 100 | |
Total manufacturing overhead cost | $ | 303,800 | |||
Determine the unit product costs of the Deluxe and Standard products under the activity-based costing system. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.) |
Deluxe | Standard | |
Unit product cost | $ | $ |
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