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How do find the unit product cost of each of the company

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Reference no: EM132607770

Wyoming Manufacturing Limited has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labour-hours (DLHs).

The company has two products, Widgets and Trinkets, about which it has provided the following data:

?                                                     Widgets                       Trinkets

Direct Materials per unit             $11.25                      $62.70

Direct Labour per unit                 $2.00                      $12.00

Direct labour hours per unit          0.20                    1.20

Annual production                 45,000                     10,000

The firm's estimated total manufacturing overhead for the year is $1,521,960 and the firm's estimated total direct labour-hours for the year is 21,000.

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

Activities                                               Widgets                        Trinkets                         Total

Supporting direct labour                      9,000                         12,000                    21,000

Setting up machines                                814                       374                        1,188

Parts administration                                924                             1,012                          1,936

Activities & Drivers                                      Estimated MOH cost

Supporting direct labour (DLH)                         $352,000

Setting up machines (setups)                           $201,960

Parts Administration (part types)                      $968,000

Total                                                             $1,521,960

Required:

Question 1: Determine the unit product cost of each of the company's two products under the traditional costing system. ?????

Question 2: Determine the unit product cost of each of the company's two products under activity-based costing system.

Reference no: EM132607770

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