Question
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below: Deluxe Standard Direct materials per unit $ 68.00 $
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below: |
Deluxe | Standard | |||||
Direct materials per unit | $ | 68.00 | $ | 56.00 | ||
Direct labor per unit | $ | 26.00 | $ | 21.20 | ||
Direct labor-hours per unit | 0.70 | DLHs | 1.40 | DLHs | ||
Estimated annual production | 10,000 | units | 50,000 | units | ||
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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 | $451,000 | |
Estimated total direct labor-hours | 50,000 | DLHs |
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Required: | |
1. | Determine the unit product costs of the Deluxe and Standard products under the companys traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) |
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 Overhead Cost | Deluxe | Standard | Total | |
Supporting direct labor (direct labor-hours) | $ | 250,000 | 10,000 | 40,000 | 50,000 |
Batch setups (setups) | 132,000 | 200 | 100 | 300 | |
Safety testing (tests) | 69,000 | 30 | 70 | 100 | |
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Total manufacturing overhead cost | $ | 451,000 | |||
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Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.) |
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