Pryad Corporation makes ultra-lightweight backpacking tents. Data concerning the company€™s two product lines appear below:

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:
Estimated total manufacturing overhead . . . . . . . . . . $290,000
Estimated total direct labor-hours . . . . . . . . . . . . . . . 50,000 DLHS

Required:
1. Determine the unit product costs of the Deluxe and Standard products under the company€™s traditional costing system.
2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an activity-based costing system. The activity-based costing system would have the following three activity cost pools:

Determine the unit product costs of the Deluxe and Standard products under the activity-based costingsystem.

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Deluxe Standard $60.00 $9.60 $45.00 Direct labor per unit. . . .. . . . . . . Direct labor-hours per unit.... Estimated annual production $7.20 0.8 DLHs 0.6 LHs 10,000 units 70,000 units EstimatedExpected Activity Overhead Cost Deluxe Standard Total Activities and Activity Measures Supporting direct labor (direct labor-hours) $ Batch setups (setups) . Safety testing (tests) . Total manufacturing overhead cost . . $150,000 8,000 42,000 50,000 50 250 20 100 60,000 80,000 $290,000 200 80