Kunkel Company makes two products and uses a conventional 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:
|
Mercon |
Wurcon |
| Direct materials cost per unit |
$ |
13.90 |
$ |
21.90 |
| Direct labor cost per unit |
$ |
5.90 |
$ |
2.10 |
| Direct labor-hours per unit |
|
0.50 |
|
0.25 |
| Number of units produced |
|
14,000 |
|
85,000 |
|
These products are customized to some degree for specific customers.
1.The company's manufacturing overhead costs for the year are expected to be $663,875. Using the company's conventional costing system, compute the unit product costs for the two products. (Do not round intermediate calculation. Round your final answers to 2 decimal places.)
|
Mercon |
Wurcon |
| Unit product cost |
$ |
$ |
2.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 |
Total |
| Engineering design time (in hours) |
3,200 |
2,000 |
5,200 |
Compute the unit product costs for the two products using the proposed ABC system. (Round your final answers to 2 decimal places.)
|
Mercon |
Wurcon |
| Unit product cost |
$ |
$ |