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Check my workCheck My Work button is now enabledItem4Item 4 25 points Stillicum Corporation makes ultra light-weight backpacking tents Data concerning the company’s two product

Check my workCheck My Work button is now enabledItem4Item 4 25 points

Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company’s two product lines appear below:

  Deluxe Standard
Direct materials per unit $ 53.00   $ 41.00  
Direct labor per unit $ 11.00   $ 9.20  
Direct labor-hours per unit   0.70 DLHs   1.40 DLHs
Estimated annual production   10,000 units   50,000 units

 

 

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

       
Estimated total manufacturing overhead $ 603,000  
Estimated total direct labor-hours   77,000 DLHs

 


Required:

1.Determine the unit product costs of the Deluxe and Standard products under the company’s traditional costing system.

2.The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools:

    Expected Activity
Activity Cost Pools and Activity Measures Estimated
Overhead Cost
Deluxe Standard Total
Supporting direct labor (direct labor-hours) $ 462,000 7,000 70,000 77,000
Batch setups (setups)   87,000 200 100 300
Safety testing (tests)   54,000 30 70 100
Total manufacturing overhead cost $ 603,000      

 

 

Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system

Jun 25 2020 View more View Less

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