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Kuechle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct

Kuechle 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, I49L and B26W, about which it has provided the following data:

  149L B26W
  Direct materials per unit $ 17.20    $ 61.40
  Direct labor per unit $ 17.80    $ 59.30  
  Direct labor-hours per unit   0.70      2.40  
  Annual production   39,600      16,600
 

The company's estimated total manufacturing overhead for the year is $3,032,868 and the company's estimated total direct labor-hours for the year is 67,560.

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

  Activities and Activity Measures Estimated
Overhead Cost
  Supporting direct labor (DLHs) $ 878,280     
  Setting up machines (setups)   784,548     
  Parts admission (part types)   1,370,040     
     
  Total $ 3,032,868     
     
 
    Activities 149L B26W Total
    Supporting direct labor 27,720     39,840     67,560    
    Setting up machines 831     2,610     3,441    
    Parts admission 1,750     1,190     2,940    
 
Required:
a.

Determine the unit product cost of each of the company's two products under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

            149L            B26W
  Unit product cost $    $   
 
b.

Determine the unit product cost of each of the company's two products under activity-based costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

            149L              B26W
  Unit product cost $    $   
 

Jun 24 2020 View more View Less

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