Mathias Company manufactures a number of specialized machine parts. Part B unkka-22 uses $35 of direct materials and $15 of direct labor per unit. Mathias?? estimated manufacturing overhead is as follows:Materials handling ........ $100,000Machining .......... 200,000Factory supervision ....... 150,000Total ............ $450,000Overhead is applied based on direct labor costs, which were estimated at $200,000. Mathias is considering adopting activity-based costing. The cost drivers are estimated at:

Instructions(a) Compute the cost of 1,000 units of Bunkka-22 using the current traditional costing system.(b) Compute the cost of 1,000 units of Bunkka-22 using the proposed activity-based costing system. Assume the 1,000 units use 2,500 pounds of materials, 500 machine hours, and 1,000 direct labor hours.

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Cost Driver Weight of materials Machine hours Direct labor hours Expected Use 50,000 pounds 20,000 hours 12,000 hours Activity Materials handling Machining Factory supervision