1. Calculate the unit product cost for Model A using the traditional costing system.

2. Calculate the unit product cost for Model A using the ABC system.

3. Compare the unit product cost for Model A between these two costing systems. If the company continues to use its traditional costing system, what does that tell you about Model A?

Activity cost pool Product design Material handling Supervision of direct labor Machine maintenance Cost-allocation base Number of design changes Number of orders Direct labor hours Machine hours Indirect costs in cost pool $180,000 $424,000 $584,000 $612,000 Direct materials cost per unit Direct labor hours (DLH) per unit Direct labor cost per DLH Units produced Number of design changes Number of orders Machine hours (MH) per unit Model A $6 per unit 0.5 DLH per unit $15 per DLH 80,000 units 5 design changes 10,800 orders 0.8 MH per unit Model B Model C $8 per unit $14 per unit 4 DLH per unit 6 DLH per unit $15 per DLH $15 per DLH 50,000 units 22,500 units 15 design changes 30 design changes 6,400 orders 2,800 orders 1.3 MH per unit 2.6 MH per unit