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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
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: Direct materials per unit Direct labour per unit Direct labour hours per unit Annual production C18R $10.20 $8.40 0.40 30,000 G19R $50.50 $25.20 1.20 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: ACDR Activities and Activity Measures Supporting direct labour (DLHS) Setting up machines (setups) Parts administration (part types) Total Estimated Overhead Cost of Activity Quantity of Activity $552,000 132,480 780,000 $1,464,480 Activities Supporting direct labour Setting up machines Part administration C18R 12,000 1200 2000 G19R 12,000 200 4000 Total 24,000 1,400 6000 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
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