## Saturday, 15 November 2014

### Guinta 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, O48C and G94Z, about which it has provided the following data:

 Guinta 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, O48C and G94Z, about which it has provided the following data:

 O48C G94Z Direct materials per unit \$ 24.80 \$ 56.30 Direct labor per unit \$ 24.10 \$ 63.20 Direct labor-hours per unit 0.70 2.40 Annual production (units) 38,800 18,300

 The company's estimated total manufacturing overhead for the year is \$3,224,840 and the company's estimated total direct labor-hours for the year is 71,080.

 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 EstimatedOverhead Cost Supporting direct labor (DLHs) \$ 426,480 Setting up machines (setups) 723,840 Parts administration (part types) 2,074,520 Total \$ 3,224,840

 Activities O48C G94Z Total Supporting direct labor 27,160 43,920 71,080 Setting up machines 800 3,360 4,160 Parts administration 2,460 1,880 4,340

 Required: a. Determine the unit product cost of each of the company's two products under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "\$" sign in your response.)

 O48C G94Z Unit product cost \$ \$

 b. Determine the unit product cost of each of the company's two products under activity-based costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "\$" sign in your response.)

 O48C G94Z Unit product cost \$ \$

Explanation: