Testbank Exercise 3

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 following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.

Activity Pool		Department Costs		Cost driver
Binding		$258,615.00		Number of units
Printing		878,419.50		Machine hours
Product design		188,034.00		Change orders
General		483,031.50		None
Total overhead costs		$1,808,100.00

Other information is as follows:

		Tablets		Books
Units		82,100		20,525
Direct materials cost per unit		$4.00		$12.00
Direct labor cost per unit		$5.00		$10.00
Direct labor hours		28,700		14,350
Machine hours		161,400		121,050
Change orders		1,694		3,388

Determine the unit product cost for Tablets using the traditional costing system.