Reference no: EM132657609
Denim Ware Quantity. Direct Costs. MachineHours. Material Moves Set- Up
Hats. 1,200,000. $1,600,000 81,250 450,000 150
Jeans 100,000. $300,000. 43,750 150,000 100
In addition to the above information,
Cost of running the Machines: $1,200,000
Cost of moving materials: $2,160,000
Cost of Set-ups: $1,440,000
Required:
Question 1. Compute the unit cost of each hat and each pair of jeans using traditional unit based costing.
Question 2. Compute the unit cost of each hat and each pair of jeans using activity-based costing.
Question 3. Describe why the differences in per unit costs occurred and recommend to Zach whether he should continue with his plan.
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