Upsilon Foods
•Upsilon Foods is evaluating the cost structure of two products: Bread and Cake.
•Bread: Direct materials - $40,000, Direct labor - $20,000, Overhead - $10,000
•Cake: Direct materials - $60,000, Direct labor - $30,000, Overhead - $15,000
•The company applies overhead based on direct labor hours. Total direct labor hours: 4,000. Bread uses 1,500 labor hours, and Cake uses 2,500 labor hours.
Requirement: Calculate the total cost for each product using traditional costing and compare it with the ABC method. Discuss the impact of the costing method on product pricing and profitability.

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