Answer

38. Altima Company uses an overhead costing system based on direct labor hours for its two products X an Y. The company is considering adopting an activity-based costing system, and collects the following information for the month of October. Product Y 2,000 Product X Production units Direct materials cost per unit Direct labor oost per hour Direct labor houns $50.00 $1000$4000 $10.00 6,000 34000 $1000 34,000 Overhead Activity Consumption Total 1,000 setups 1,000feet cost Machine setup Engineering change order $ 60,000 40,000 90,000 300 20 300 700 80 700 100 oeders Facility rent Note: Direct labor above is on a per hour basis, therefore, you must convert it to direct labor per unit Required: (I) Compute the unit manufacturing cost of each product under a volume-based costing s direct labor hours. (10 pts) (2) Comp ystem based on ute the unit manufacturing cost of each product under the activity-based costing system (10pts). (3) Briefly discuss the theoretical implications of your results. (5 pts)