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Werger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on
Werger 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, W82R and L48S, about which it has provided the following data: Direct materials per unit W82R $ 25.60 L48S $ 59.40 Direct labor per unit Direct labor-hours per unit Annual production (units) $ 16.30 0.70 38,800 $ 60.20 2.40 18,100 The company's estimated total manufacturing overhead for the year is $3,336,438 and the company's estimated total direct labor- hours for the year is 70,600. 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 Supporting direct labor (DLHS) Setting up machines (setups) Parts administration (part types) Total Estimated Overhead Cost $ 1,059,000 606,318 1,671,120 $ 3,336,438 Activities Supporting direct labor Setting up machines Parts administration Required: W82R 27,160 862 2,350 L48S Total 43,440 70,600 3,500 4,362 1,610 3,960 a. Determine the unit product cost of each of the company's two products under the traditional costing system. b. Determine the unit product cost of each of the company's two products under activity-based costing system. (For all requirements, round your intermediate calculations and final answers to 2 decimal places.) a. Unit product cost b. Unit product cost W82R L48S
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