Week 9 Revision question: Activity based costing Aerodec Inc., manufactures and sells two types of wooden deck chairs: Deluxe and Tourist. Annual sales in units, direct labour hours per unit, and total direct labour hours per year are as follows: TOTAL HOURS Deluxe deck chair: 2,000 units x 5 DLHS per unit 10,000 Tourist deck chair: 10,000 units x 4 DLHs per unit 40,000 TOTAL DIRECT LABOUR HOURS 50,000 Costs for materials and labour for one unit of each product are given below: Deluxe Tourist Direct materials $25 $17 Direct labour (at $12 per hour) $60 $48 Manufacturing overhead costs total $800,000 each year. The breakdown of these costs among the company's six activity cost pools is given below. Activity Category Cost Driver Estimated Consumptio Consumption overhead cost n of cost of cost driver driver (Tourist) (Deluxe) Labour related Direct labour $80,000 10,000 40,000 hours Machine setups Number of $150,000 3,000 2,000 setups Parts Number of $160,000 50 30 administration parts Production orders Number of $70,000 100 300 orders Material receipts Number of $90,000 150 600 receipts General factory Machine $250,000 12,000 28,000 hours Required: (a) Using a single plantwide cost driver rate based on direct labour hours, determine the cost of producing a unit of the deluxe and tourist deck chairs. (b) Deter r deck chair 1 d costin