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Determine the unit product cost for tablets

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Reference no: EM131116031

Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.

Activity Pool Department Costs Cost driver
Binding $229,687.50 Number of units
Printing 787,167.50 Machine hours
Product design 207,468.00 Change orders
General 728,677.00 None
Total overhead costs $1,953,000.00

Other information is as follows:

Tablets Books
Units 73,500 18,375
Direct materials cost per unit $4.00 $12.00
Direct labor cost per unit $5.00 $10.00
Direct labor hours 31,000 15,500
Machine hours 145,100 108,825
Change orders 1,921 3,842

(a) Determine the unit product cost for Tablets using the traditional costing system.

(b) Determine the unit product cost for Tablets using the activity-based costing system.

Reference no: EM131116031

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