Use below information for Questions 5 to 6:

Luxury Furniture designs and builds factory-made, premium, wood armoires for homes. All are of white oak. Its budgeted manufacturing overhead costs for the year 2017 are as follows.

Overhead Cost Pools	Amont ($)
Purchasing	47,000
Handling materials	50,000
Production (cutting, milling, finishing)	136,000
Setting up machines	85,000
Inspecting	60,000
Inventory control (raw materials and finished goods)	87,000
Utilities	100,000

For the last 4 years, Luxury Furniture has been charging overhead to products on the basis of materials cost. For the year 2017, materials cost of $570,000 were budgeted. Jim Brigham, owner-manager of Luxury Furniture, recently directed his accountant, Bob Borke, to implement the activity-based costing system that he has repeatedly proposed. At Jim Brighams request, Bob and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.

Overhead Cost Pools Activity Cost Drivers Expected Use of Cost Drivers

Purchasing Number of orders 500

Handling materials Number of moves 5,700

Production (cutting, milling, finishing) Direct labor hours 65,000

Setting up machines Number of setups 1,600 Inspecting Number of inspections 4,300

Inventory control (raw materials and finished goods) Number of components 40,000

Utilities Square feet occupied 57,000

Debbie Steiner, sales manager, has received an order for 16 luxury armoires from Thoms Interior Design. At Debbies request, Bob prepares cost estimates for producing 16 armoires so Debbie can submit a contract price per armoire to Thoms. He accumulates the following data for the production of 16 armoires.

DM Cost ($)	5,300
DL Cost ($)	3,700
DL Hours	200
Number of Purchase Orders	3
Number of Materials Moves	32
Number of Machine Setups	4
Number of Inspections	20
Number of Components	640
Number of Square Feet Occupied	320

Q-5) What is the unit manufacturing cost per armoire under traditional costing?

Q-6) What is the unit manufacturing cost per armoire under the proposed activity-based costing?