Cabio Company manufactures two products, Product C and Product D. The company estimated it would incur $198,910 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period’s operations appear below: Product C Product D Estimated volume 4,850 units 4,050 units Direct labor-hours per unit 3.30 hours 3.40 hours Direct materials cost per unit $ 22.10 $ 36.30 Direct labor cost per unit $ 33.00 $ 34.00 

Required
a-1. Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.) 

a-2. Determine the unit product cost of each product for the current year. (Round your intermediate calculations and final answers to 2 decimal places.) 

b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below: Estimated Expected Activity Activity Cost Pools Overhead Cost Product C Product D Total Machine setups $ 14,290 320 330 650 Purchase orders 81,540 1,240 1,580 2,820 Order size 103,080 16,005 13,770 29,775 Total $ 198,910 Determine the unit product cost of each product for the current period using the activity-based costing approach. (Round your intermediate calculations and final answers to 2 decimal places.)

Answer rating: 100% (QA)

Requirement a1 Predetermined overhead rate 668 per direct labor hour Working notes Predetermined ove... View the full answer