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Wiggles Ltd manufactures hair dryers and hair curling wands. Both products require materials and direct labour hours for completion: Direct Materials $ 5.80 $ 9.80
Wiggles Ltd manufactures hair dryers and hair curling wands. Both products require materials and direct labour hours for completion: Direct Materials $ 5.80 $ 9.80 Direct Labour (1 hour) $ 8.50 $ 8.50 Annual Direct Labour Hours 82,000 43,000 Annual Units Produced 82,000 43,000 The traditional product costing system was based on direct labour hours. It will now be replaced by and activity-based costing system. Activity Cost Pool Estimated Overhead Cost Driver Expected Use of Cost Drivers Dryers Wands Purchasing $ 70,000.00 Orders 600 280 320 Receiving $ 44,000.00 Kilograms 172,000 74,000 98,000 Assembling $ 174,000.00 Parts 780,000 390,000 390,000 Testing $ 54,000.00 Tests 136,000 81,000 55,000 Finishing $ 60,000.00 Units 122,000 72,000 50,000 Packing & Shipping $ 62,000.00 Cartons 14,000 9,800 4,200 $ 464,000.00 Expected Use of Cost Drivers per Product Under activity based costing, calculated the total unit cost of both products. [5 marks]
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