Stockin Company produces Tablets and Books. Total overhead costs traditionally h

Question

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 $252,843.75 Number of units Printing 773,647.00 Machine hours Product design 217,782.00 Chang orders General 352,777.25 None Total overhead costs $1,597,050.00 other information is as follows: Tablets Books Units 77,500 19,375 Direct materials cost per unit $4.00 $12.00 Direct labor cost per unit $5.00 $10.00 Direct labor hours 27,300 13,650 Machine hours 139,900 104,925 Change orders 1,962 3,924 (a) Determine the unit product cost for Tablets using the traditional costing system. (Round answer to 2 decimal places, e.g. 1.64.) Unit product cost for Tables

Explanation / Answer

Cost Cost Driver Amount Total Number of drivers Cost per unit Binding Number of units 252843.8 96875 2.61 Printing Machine hours 773647 244825 3.16 Product Design Change orders 217782 5886 37 Particulars Tablets Books Direct material costs 4 12 Direct labor cost 5 10 Binding cost 2.61 2.61 Printing 5.70431 17.11293 Product Design 0.936697 7.493574 Total Cost 18.25101 49.2165

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