RF 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, Y47R and G13V, about which it has provided the following data:
Y47R
Direct materials per unit: $21.50
Direct labor per unit: $3.20
Direct labor hours per unit: 0.20
Annual production (units): 35,000
G13V
Direct materials per unit: $43.30
Direct labor per unit: $38.40
Direct labor hours per unit: 2.40
Annual production (units): 15,000
The company's estimated total manufacturing overhead for the year is $1,879,960 and the company's estimated total direct labor-hours for the year is 43,000.
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
Assembling products (DLHs)
$817,000
Preparing batches (batches)
$211,560
Milling (MHs)
$851,400
Total
$1,879,960
Activities
Y47R
G13V
Total
Assembling products
7,000
36,000
43,000
Preparing batches
473
1,290
1,763
Milling hours
2,064
774
2,838
Required: Round all answers to two decimal places
Determine the unit product cost of each of the company's two products under the traditional costing system.
Unit product cost, Y47R: $
Unit product cost, G13V: $
2. Determine the unit product cost of each of the company's two products under the activity-based costing system.
Unit product cost, Y47R: $
Unit product cost, G13V: $