Sonotec company Ltd is into the manufacture of variety of hand-crafted window frames for schools. The companys manufacturing activities and related data for the current year are as follows:

Two styles of window frames were produced in July, a wood window frame with fewer parts and a metal window frame that required no staining activities. Direct labour is paid 25 per hour. Quantities, direct materials costs, and other data are as follows:

The companys current traditional basis (system) of overhead allocation shows that the total manufacturing unit costs for the wood window frame is 245, while that of metal window frame is 330.

Required: QUESTIONS TO BE ANSWERED (i) Calculate the cost allocation rates, total manufacturing costs and unit costs of the wood and metal window frames using Activity Based Costing (ABC) approach.

(ii) Assume that nonmanufacturing activities, such as product design, were analysed and allocated to the wood window frame at 10 each and the metal window frame at 15 each. In addition, similar analyses were conducted of other nonmanufacturing activities such as distribution, marketing and customer service. The support costs allocated were 50 per wood window frame and 80 per metal window frame. calculate the product cost per unit by including the nonmanufacturing costs.

Cost (activity) Driver Manufacturing Activity Material Handling Cutting Assembly Wood Staining Overhead Cost () 800,000 2,400,000 6,000,000 2,640,000 Number of parts Machine hours Direct labour hours Number of frames stained Total Volume for Cost Driver 1,600,000 parts 80,000 hours 300,000 hours 120,000 frames Units Produced Direct Machine Material () Hours Number of Direct Parts Labour Hours 200,000 12,000 20,000 6,000 Wood window frames Metal window frames 10,000 2,000 1,200,000 400,000 10,000 1,000