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Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time.
This time is expected to be distributed as follows during the upcoming year:
Mercon Wurcon TotalEngineering design time (in hours) $4,000 $4,000 8,000 Compute the unit product costs for the two products using the proposed ABC system. (For all requirements, do not round intermediate calculations. Round your final answers to 2 decimal places.) Problem 1. What is the unit product cost under conventional system for Mercon and Wurcon?
Problem 2. What is the unit product cost under ABC system for Mercon and Wurcon?
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