Solution-Determine the unit product cost for tablets

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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Determine the unit product cost for tablets

Reference no: EM131116031

Reference no: EM131116031

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