Using the companys traditional cost allocation system, calculate the full cost per unit for all three types of cabins. Also, calculate gross profit dollars and gross profit percentage for each cabin. Label your answers. Make the same calculations as in (1) for each cabin using activity-based costing (ABC). Label your answers.

		Basic	Mid-Level	Deluxe
Units built and sold		200	100	30
Sale price per unit		$300,000	$450,000	$800,000
Direct material cost/unit		$80,000	$130,000	$180,000
Direct labor cost/unit		$35,000	$38,000	$40,000

The overhead cost allocation system used by the accounting department was enacted by the recently departed Controller who appreciated the easy convenience of using a single plant-wide rate in order to allocate overhead costs to products. During fiscal year 2015, the actual overhead rate was $60.00 per direct labor hour. This was determined by dividing total overhead cost ($18,000,000) by the total direct labor hours

(300,000) for all models of constructed cabins. The companys average cost per direct labor hour was $40.00.

Key activities of the company:	Total Frequency: per model: Basic Mid-Level Deluxe
Machine operating hours	160,000 hours 30,000 50,000 80,000
Purchase order administration	650 times 100 200 350
Machine setups	525 times 50 125 350
Quality control inspections	775 times 125 225 425
Direct labor hours	300,000 hours 175,000 95,000 30,000

Cost of overhead assigned to activity pools:

Purchase orders: $3,000,000

General overhead: $4,000,000 (Bobbi approved assignment of these costs based on direct labor hours.)

Quality control: $2,500,000

Machine setup: $3,500,000

Machine related: $5,000,000