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Sergio Uribe Project Partial AOCI 4341 Juon Company manufactures and the styl Silver and one Production takes 25. 25, and 10 machine w brass, chrome,
Sergio Uribe Project Partial AOCI 4341 Juon Company manufactures and the styl Silver and one Production takes 25. 25, and 10 machine w brass, chrome, and white faucets, respectively. The following a e t day Projected sales in units Brones O Pol Silver Brushed St SCUDO 40.000 PER UNIT data: Selling price 50 Direct materials Direct labor Overhead cost based on direct labor hours (traditional system) 515 $12 $3 10 Hours per 1000-unit batch: Direct labor hours Machine hours Setup hours Inspection hours 1.0 0.5 1.0 Total overhead costs and activity levels for the year are estimated as follows: Overhead costs Activity Direct labor hours Machine hours Setups Inspections Activity levels 2,900 hours 2,400 hours 95 setup hours 2,700 inspection hours $465,500 $405,000 $870,500 Required: a. Using the traditional system, determine the operating profit per unit for the bronze style of faucet. b. Determine the activity-cost-driver rate for setup costs and inspection costs. c. Using the ABC system, for the bronze style of faucet: 1. compute the estimated overhead costs per unit. 2. compute the estimated operating profit per unit. d. Explain the difference between the profits obtained from the traditional system and the ABC Which system provides a better estimate of profitability? Why
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