Question

Stillcum Corporation

Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company's two product lines appear below Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production $ 59.00 17.00 $ 47.00 $ 14.00 0.70 DLHS 10,000 units 50,000 units .40 DLHS The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below Estimated total manufacturing overhead Estimated total direct labor-hours 627,00 77,000 DLHs Required: 1. Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: ed Activity Estimated Overhead Activity Cost Pools and Activity Measures Supporting direct labor (direct Labor-hours) Batch etups (setups) Safety teating (tests) Total manufacturing overhead coat Cost Deluxe Standard Total 462,000 7,000 70,00077,000 300 200 30 105,000 100 70 100 627,000 Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. Complete this question by entering your answers in the tabs below Required 1 Required 2 Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system (Round your intermediate calculations and final answers to 2 decimal places.) Deluxe Standard Unit product cost Prev 1 or 2 Next

Answer 1

Activity cost pool	Estimated overhead cost	Expected activity	Activity rate
Supporting direct labor	462000	77000	6
Batch setups	105000	300	350
Safety testing	60000	100	600
	Deluxe			Standard
	Activity used	Activity rate	Overhead allocated	Activity used	Activity rate	Overhead allocated
Activity cost pool
Supporting direct labor	7000	6	42000	70000	6	420000
Batch setups	200	350	70000	100	350	35000
Safety testing	30	600	18000	70	600	42000
Totals			130000			497000
Divide by units			10000			50000
Overhead per unit			13.00			9.94
2
	Deluxe	Standard
Direct materials per unit	59.00	47.00
Direct labor per unit	17.00	14.00
Overhead per unit	13.00	9.94
Unit product cost	89.00	70.94