Woodland Industries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $11 per hour and that there were no beginning inventories. The following information was available for 2016, based on an expected production level of 52,400 units for the year, which will require 215,000 direct labor hours: Cost Driver Used as Allocation Budgeted Costs for 2016 55,900 Activity Cost Driver Base Cost Allocation Rate S Number of parts used S 0 26 per part Materials handling Cutting and lathe work Assembly and inspection 2,760,600 Number of parts used 3,676,500 12.84 per part 17.10 per hour Direct labor hours The following production, costs, and activities occurred during the month of July Number of Parts Direct Labor Produced Direct Materials CostsUsedHours 3,450 $101,600 356 13,000 Required: a. Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of July (using the activity-based costing approach). (Round "Cost per unit produced" to 2 decimal places.) Total manufacturing cost Cost per unit produced b. Assume instead that Woodland Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activity-based costing system previously described). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of July. (Hint You win need to calculate the predetermined overhead application rate using the total budgeted overhead costs for 2016) (Round"Cost per unit produced" to 2 decimal places.) Total manufacturing cost Cost per unit produced c. Which approach do you think provides better information for manufacturing managers? Activity based costing Direct labor hours basis Reterences eBook & Resources