Cabigas company manufactures two products

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Reference no: EM13951969

Cabigas Company manufactures two products, Product C and Product D. The company estimated it would incur $355,840 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period's operations appear below:

 

Product C

Product D

  Estimated volume

 

2,000

units

 

 

2,700

units

 

  Direct labor-hours per unit

 

4.50

hours

 

 

1.80

hour

 

  Direct materials cost per unit

$

24.00

 

 

$

26.60

 

 

  Direct labor cost per unit

$

34.00

 

 

$

11.60

 

 

 

 

Required:

 

The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below:

 

Activities

Estimated
Overhead
Costs

Expected Activity

Product C

Product D

Total

Machine setups

$

22,230

180

210

390

Purchase orders

 

162,250

1,250

1,500

2,750

General factory

 

171,360

5,000

3,160

8,160

 

 

 

 

 

 

Total

$

355,840

 

 

 

 

 

 

 

 

 

 

 

Determine the unit product cost of each product for the current period using the activity-based costing approach. (Round your intermediate calculations and final answers to 2 decimal places.)

 

 

Product C

Product D

  Unit product cost

$

$

Reference no: EM13951969

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