Western Manufacturing Corporation manufactures various electronics products and follows a traditional

(job-order) costing system in which it applies manufacturing overhead to its products using a

predetermined overhead rate based on direct labour-hours (DLHs).

The company has two products, C18R and G19R, about which it has provided the following data:

C18R G19R

Direct materials per unit $10.20 $50.50

Direct labour per unit $8.40 $25.20

Direct labour hours per unit 0.40 1.20

Annual production 30,000 10,000

The company's estimated total manufacturing overhead for the year is $1,464,480 and the company's

estimated total direct labour-hours for the year is 24,000.

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 Estimated Overhead Cost of Activity Quantity of Activity ACDR

Supporting direct labour (DLHs) $552,000

Setting up machines (setups) 132,480

Parts administration (part types) 780,000

Total $1,464,480

Activities C18R G19R Total

Supporting direct labour 12,000 12,000 24,000

Setting up machines 864 240 1,104

Part administration 600 960 1,560

Submission Instructions

a. Determine the manufacturing overhead cost per unit of each of the company's two products under

the traditional costing system.

b. Determine the manufacturing overhead cost per unit of each of the company's two products under

activity-based costing system.