Kuechle Manufacturing Corporation Has a Traditional Costing System in Which

question 10

Essay

Kuechle 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,I49L and B26W,about which it has provided the following data:
The company's estimated total manufacturing overhead for the year is $1,793,790 and the company's estimated total direct labor-hours for the year is 57,000.
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:
Required:
a.Determine the unit product cost of each of the company's two products under the traditional costing system.
b.Determine the unit product cost of each of the company's two products under activity-based costing system.

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Definitions:

Skull

The bone structure that forms the head, protecting the brain and supporting the structures of the face.

Intramembranous Ossification

Intramembranous ossification is a process of bone development in which bone tissue is directly formed from mesenchymal tissue without first being cartilage.

Endochondral Ossification

A biological process by which bone tissue is formed from cartilage, notably in the formation and growth of long bones.

Foramen

A natural opening or passage, especially in a bone, allowing for the passage of nerves or vessels.