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Your company wants to do a comparison between the current traditional costing system and the newly developed ABC system. 200 units were completed during the

Your company wants to do a comparison between the current traditional costing system and the newly developed ABC system. 200 units were completed during the month. Associated costs for the month are: Direct material, $21,500; Average direct labor cost, $15/hour; Direct labor hours, 215; Overhead allocation is 175% of direct labor costs.
Complete the cost comparsion between ABC and Traditional Costing for the order. Calculate the Activity Costs per Unit.
Activity Cost Driver Activity Amount Activity Rate
Design Design Hours 25 hours $60 per hour
Setup Number of Setups 6 setups $40 per setup
Production Equipment Hours 45 hours $125 per hour
Assembly Direct Labor Hours 20 hours $40 per hour
Shipping/Packaging Direct Labor Hours 30 hours $25 per hour
Calculations: Fill-in the labels and calculations in the table below
Traditional Costing:
Total Cost Overhead Allocation Rate
ABC Costing
Total Activity Costs for Job
Activity Costs per Unit
ABC Total Costs
Total Activity Costs
Total Cost (ABC) Overhead Allocation Rate
In 1 -2 paragraphs below, analyze the difference between ABC & Traditional Costing. What potential benefit does this reflect of ABC?

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