Determine the unit product cost of each of the company

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Reference no: EM131920350

Problem - Jonson and Associates Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, B21P and O11L, about which it has provided the following data:

 

B21P

O11L

Direct materials per unit

$21.10

$47.30

Direct labor per unit

$16.80

$37.80

DLHs per unit

0.80

1.80

Annual production

45,000

10,000

The Company's estimated total manufacturing overhead for the year is $2,870,100 and the company's estimated total direct labor-hours for the year is 54,000.

The company is considering using a variation of ABC to determine its unit product costs for external reports. Data for this proposed ABC system appear below:

Activities and Activity Measures

Estimated Overhead Cost

Assembling products (DLHs)

$1,404,000

Preparing batches (batches)

429,300

Milling (MHs)

1,036,800

Total

$2,870,100

 

Activities

B21P

O11L

Total

Assembling products (DLHs)

36,000

18,000

54,000

Preparing batches (batches)

972

1,890

2,862





Milling (MHs)

1,728

864

2,592

On the basis of the given data, complete the following:

Determine the unit product cost of each of the company's two products under the traditional costing system.

Determine the unit product cost of each of the company's two products under ABC system.

Reference no: EM131920350

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