Business, 14.02.2020 23:27 allenpaietonp9v8sv

Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:

Rascon Parcel
Direct materials cost per unit $ 15 $ 8
Direct labor cost per unit $ 2.90 $ 3.80
Direct labor-hours per unit .20 .25
Number of units produced 20,000 41,000

These products are customized to some degree for specific customers.

Required:
1.
The company's manufacturing overhead costs for the year are expected to be $299,250. Using the company's traditional costing system, compute the unit product costs for the two products. (Round your intermediate calculations and final answers to 2 decimal places.)

2.
Management is considering an activity-based absorption 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:

Rascon Parcel Total
Engineering design time (in hours) 4,400 4,400 8,800
Compute the unit product costs for the two products using the proposed activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.)

Answers: 2

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