Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company's two product lines appear below:

Deluxe Standard

Direct materials per unit $55.00 $43.00

Direct labor per unit $13.00 $10.80

Direct labor-hours per unit 0.70DLHs 1.40DLHs

Estimated annual production 10,000units 50,000units

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

Estimated total manufacturing overhead $457,000

Estimated total direct labor-hours 77,000DLHs

Required:

1.Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system.

2.The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools:

Expected Activity

Activity Cost Pools (and Activity Measures)Estimated Estimated Overhead Cost Deluxe Standard Total

Supporting direct labor (direct labor-hours) $308,000 7,000 70,000 77,000

Batch setups (setups) 93,000 200 100 300

Safety testing (tests) 56,000 30 70 100

Total manufacturing overhead cost $457,000

Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system.