Calculate the cost per unit for each backpack using ABC and Traditional Costing (use direct labor hours).

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ABC Company makes variety of backpacks. The activity centers and budgeted information for factory overhead for the year are: Activity Centers Materials Handling Cutting Assembly Sewing Overhead Costs P4,000,000 12,000,000 48,000,000 10,000,000 Cost Driver Weight of Materials Number of shapes Direct Labor hours Machine hours ABC Overhead Rate P4 per pound P25 per shape P135 per labor hour P72 per machine hour Two styles of backpacks were produced in December, the HardBy and the DayDreamer. The quantities and other operating data for the month are: Direct Materials Costs Direct Labor Costs Direct Materials weight in pounds Number of shapes Assembly direct labor hours Sewing Machine hours Units Produced HardBy DayDreamer P171,490 P222,432 P450,000 P65,900 50,000 15,000 35,000 15,000 7,500 1,200 12,500 1,800 5,000 1,000 ABC Company makes variety of backpacks. The activity centers and budgeted information for factory overhead for the year are: Activity Centers Materials Handling Cutting Assembly Sewing Overhead Costs P4,000,000 12,000,000 48,000,000 10,000,000 Cost Driver Weight of Materials Number of shapes Direct Labor hours Machine hours ABC Overhead Rate P4 per pound P25 per shape P135 per labor hour P72 per machine hour Two styles of backpacks were produced in December, the HardBy and the DayDreamer. The quantities and other operating data for the month are: Direct Materials Costs Direct Labor Costs Direct Materials weight in pounds Number of shapes Assembly direct labor hours Sewing Machine hours Units Produced HardBy DayDreamer P171,490 P222,432 P450,000 P65,900 50,000 15,000 35,000 15,000 7,500 1,200 12,500 1,800 5,000 1,000

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To calculate the cost per unit for each backpack using ABC ActivityBased Costing and Traditional Costing using direct labor hours we need to follow th... View the full answer