Assignment
Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.
|
Activity Pool
|
Department Costs
|
Cost driver
|
|
Binding
|
$237,795.00
|
Number of units
|
|
Printing
|
772,264.50
|
Machine hours
|
|
Product design
|
197,760.00
|
Change orders
|
|
General
|
937,180.50
|
None
|
|
Total overhead costs
|
$2,145,000.00
|
|
Other information is as follows:
|
Tablets
|
Books
|
|
Units
|
76,400
|
19,100
|
|
Direct materials cost per unit
|
$4.00
|
$12.00
|
|
Direct labor cost per unit
|
$5.00
|
$10.00
|
|
Direct labor hours
|
32,500
|
16,250
|
|
Machine hours
|
150,100
|
112,575
|
|
Change orders
|
2,060
|
4,120
|
Determine the unit product cost for tablets using the traditional costing system and the activity-based costing system.