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Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers
Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the followint cost pools and cost drivers. They also decided that general costs should no longer be allocated to products. Activity Pool Binding Printing Product design General Total OH costs Department Costs Cost driver 247,500 # of units 798,000 Machine hours 191,250 Change orders 608,250 None 1,845,000 Other information is as follows: Units DM cost per unit DL cost per unit DL hours Machine hours Change orders Tablets 75,000 $4.00 $5.00 30,000 150,000 1,875 Books 18,750 $12.00 $10.00 15,000 112,500 3,750 Required: a. Determine the unit product cost for Tablets using the tradition costing system. Predetermined OH rate= Tablets Direct Materials Direct Labor Overhead
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