In: Accounting
Upton Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, Long and Short, about which it has provided the following data:
Long |
Short |
|||||||||
Direct materials per unit |
$ |
14.20 |
$ |
48.30 |
||||||
Direct labor per unit |
$ |
16.80 |
$ |
50.40 |
||||||
Direct labor-hours per unit |
0.80 |
2.40 |
||||||||
Annual production |
45,000 |
10,000 |
||||||||
The company's estimated total manufacturing overhead for the year is $3,170,400 and the company's estimated total direct labor-hours for the year is 60,000.
The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity Measures |
Estimated Overhead Cost |
||||
Direct labor support (DLHs) |
$ |
1,740,000 |
|||
Setting up machines (setups) |
422,400 |
||||
Part administration (part types) |
1,008,000 |
||||
Total |
$ |
3,170,400 |
|||
Expected Activity |
|||||
Long |
Short |
Total |
|||
DLHs |
36,000 |
24,000 |
60,000 |
||
Setups |
1,140 |
1,500 |
2,640 |
||
Part types |
900 |
2,460 |
3,360 |
Required
Calculate the unit product cost for the Long and Short product lines (round to nearest cent).