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Question Two: Wetz Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based
Question Two: Wetz Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Q30V and S33B, about which it has provided the following data: Q30V S33B Direct materials per unit. $34.10 $52.70 Direct labor per unit.. $16.10 $39.10 Direct labor-hours per unit 0.70 1.70 Annual production 30,000 10,000 The company's estimated total manufacturing overhead for the year is $1,527.600 and the company's estimated total direct labor-hours for the year is 38,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures. Assembling products (DLHs). Preparing batches (batches). Axial milling (MHs). Total Estimated Overhead Cost $ 608,000 197,600 722.000 $1.527.600 Total Assembling products.......... Preparing batches Axial milling. Q30V 21,000 456 570 S33B 17,000 1,520 874 38,000 1,976 1,444 Required: a. Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system. b. Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system
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