Great Company makes two products and uses a conventional costing system with a single plantwide. Data for the two products for the upcoming year follow: AB123 CD456 Direct materials cost per unit $12.00 $10.00 Direct labour cost per unit $3.00 $4.00 Direct labour hour per unit 0.4 0.76 Number of units produced 12,500 25,000 These products are customised to some degree for specific customers. The company's manufacturing overhead costs for the year are expected to be $360,000. Management is considering an activity-based costing (ABC) system in which half of the overhead would continue to be allocated based on direct labour hours, and the other half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: AB123: 3.000 CD456: 5.000 Total Engineering design time (in hours): 8.000.A) Calculate the total direct labour hours B) Calculate the activity rates for each activity ( direct labour hours and enginering design time) C) Calculate the engineering design time per unit for each product D) Calculate the unit product cost for each product using the proposed activity based costing systemShow every step of the calculation
Great Company makes two products and uses a conventional costing system with a single plantwide. Data for the two products for the upcoming year follow: AB123 CD456 Direct materials cost per unit $12.00 $10.00 Direct labour cost per unit $3.00 $4.00 Direct labour hour per unit 0.4 0.76 Number of units produced 12,500 25,000 These products are customised to some degree for specific customers. The company's
AB123: 3.000
CD456: 5.000
Total Engineering design time (in hours): 8.000.
A) Calculate the total direct labour hours
B) Calculate the activity rates for each activity ( direct labour hours and enginering design time)
C) Calculate the engineering design time per unit for each product
D) Calculate the unit product cost for each product using the proposed activity based costing system
Show every step of the calculation
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