Activity Based Costing 1 minute check in Cool Fit Inc. makes two products, a Runner Dog Watch and a Fit Watch. For the current year, Cool Fit has budgeted sales of 40,000 Runner Dog Watches and 400,000 Fit Watches. • Both products require 0.50 direct labour-hours to complete. • The company plans to work 500,000 hours to meet the budgeted production of all its products. • Direct materials cost $30 per unit for the Runner Dog Watch and $10 for the Fit Watch. • Direct labour costs at $16 per hour are $8 for both the Runner Dog Watch and the Fit Watch. • Total manufacturing overhead costs for the current year are estimated to be $10,000,000. • The company develops the following overhead rate based upon labour-hours. 1. Calculate the product costs using a single plantwide overhead rate.

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To calculate the product costs using a single plantwide overhead rate we first need to determine the ... View the full answer