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Similarly, Mr. Suncat has a couple of questions for you regarding the activity based costing method. He has provided the following additional information: Expected Use

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Similarly, Mr. Suncat has a couple of questions for you regarding the activity based costing method. He has provided the following additional information: Expected Use of Cost Driver: Basic Wedding Cake 0.75 hour Expected Estimated Use of Cost Overhead Drivers $15,000 4.5 hours Expected Use of Cost Driver Multi-Layer Wedding Cake 1.25 hours Expected Use of Cost Driver Custom Wedding Cake 2.5 hours Cost Pools Initial customer meeting Cost Drivers Number of hours spent with customer Number of purchase requisitions Direct Labor hours $15,000 Purchasing ingredients 1000 150 300 550 requisitions requisitions requisitions requisitions $40,000 5.5 hours 1.25 hour 2 hours 2.25 hours $70,000 9.5 hours 1.75 hours 3 hours 4.75 hours Making and baking the wedding cakes Decorating the wedding cakes Final customer meeting and cake delivery Direct Labor hours Number of wedding cakes $10,000 4200 1500 cakes 1700 cakes 1000 cakes e. Using activity-based costing, compute the total manufacturing overhead cost that is expected to be allocated to each product. Show all calculations and clearly label your answer. 1. Basic Wedding Cake 2. Multi-layer Wedding Cake 3. Custom Wedding Cake f. Using activity-based costing, compute the product cost for each product. Show all calculations and clearly label your answer. 1. Basic Wedding Cake 2. Multi-layer Wedding Cake 3. Custom Wedding Cake g. Compare the total manufacturing overhead cost and the product cost for each product under both the job-order costing method and the activity-based costing method. Which costing method would you recommend to Mr. Suncat for Suncat Cake Shop and why

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