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Upton Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct
Upton Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Long and Short, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production Long $ 15.70 $ 18.30 0.70 50,000 Short $ 47.40 $ 51.90 2.10 10,000 The company's estimated total manufacturing overhead for the year is $3,379,040 and the company's estimated total direct labor-hours for the year is 56,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Direct labor support (DLHs) Setting up machines (setups) Part administration (part types) Total Estimated Overhead Cost $1,882,640 458,400 1,038,000 $3,379,040 DLHS Setups Long 35,000 1,290 850 Expected Activity Short 21,000 2,250 2,600 Total 56,000 3,540 3,450 Part types The unit product cost of product Long under the company's traditional costing system is closest to
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