Sandeep Kaur assignment|12021 (1) Protected View Last saved by user Saved to this PC Draw Design Layout 9 References Mailings Review View Help areful files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View. to search Search Enable Editing Activity-based costing, product cost cross-subsidization. Baker's De- light (BD) has been in the food processing business three years. For its first two years (19_5 and 19_6), its sole product was raisin cake. All cakes were manufactured and packaged in one-kilogram units. A normal costing system was used by BD. The two direct cost categories were direct materials and di- rect manufacturing labour. The sole indirect manufacturing cost category- manufacturing overhead-was allocated to products using a units-of- production allocation base. BD prices on a cost-plus basis. It currently uses a "cost plus 40% of cost" guideline. In its third year (19_7), BD added a second product-layered carrot cake-that was packaged in one-kilograms. This product differs from raisin cake in several ways: More expensive ingredients are used. More direct manufacturing labour time is required. More complex manufacturing is required. In 19_7, BD continued to use its existing costing system where a unit of pro- duction of either cake was weighted the same. Direct materials costs in 19_7 were $0.60 per kilogram of raisin cake and $0.90 per kilogram of lavered carrot cake. Direct manufacturing labour O Ei W Focus + 54 7 +1 % 85 7 29 Y R T 197 ENG 6C Clear 4 IN * F Home End Insert Delete 8 9 +11 11 F G H J K Backspace NumLock 7 H Enter