Activity-Based Costing Product Costs for External Reports
Pryad Corporation makes ultra-lightweight backpacking tents. Data concerning the company’s two product lines appear below:
| Deluxe | Standard |
Direct materials per unit | $60.00 | $45.00 |
Direct labor per unit | $9.60 | $7.20 |
Direct labor-hours per unit | 0.8DLHs | 0.6DLHs |
Estimated annual production | 10,000 units | 70,000units |
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 | 5290,000 |
Estimated total direct labor-hours | 50,000 DLHs |
Required:
I. 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 for determining unit product costs for external reports with an activity-based costing system. The activity-based costing system would have the following three activity cost pools:
|
| Expected Activity | ||
Activities and Activity Measures | Estimated Overhead Cost | Deluxe | Standard | Total |
Supporting direct labor (direct labor-hours) | $150,000 | 8,000 | 42,000 | 50,000 |
Batch setups (setups) | 60,000 | 200 | 50 | 250 |
Safety testing (tests) | 80,000 | 80 | 20 | 100 |
Total manufacturing overhead cost | $290,000 |
|
|
|
Determine the unit product costs of the Deluxe and Standard products under the activity-based costing system.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.