Activity$-$Based Costing and Conventional Costs Compared

Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month.

Gas Cooker Charcoal Smoker

Units $1,0007,000$

Number of batches $4010$

Number of batch moves $8020$

Direct materials $$50,000$ $$100,000$

Direct labor $$20,000$ $$28,000$

Manufacturing overhead follows:

Activity Cost Cost Driver

Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent.

$($a$)$ Determine the total and per$-$unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct

labor dollars.

HINT: Use $8\mathrm{.}4708$ for overhead rate calculations.

$($b$)$ Determine the total and per$-$unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity$-$based

costing.