Chapter 4 - ABC Costing Class Problem #2 Vittoria Corporation manufactures two products-Carts and Wheelbarrows. The annual production and sales of Carts is 2,000 units, while 1,800 units of Wheelbarrows are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Carts require 1.0 direct labor hours per unit, while Wheelbarrows require 0.5 direct labor hours per unit. The total estimated overhead for the period is $117,500. The company is looking at the possibility of changing to an activity based costing system for its products. If the company used an activity-based costing system, it would have the following three activity cost pools: Expected activity Estimated overhead cost Activity cost pool Carts Wheelbarrows Total Setup costs $ 6,000 200 batches 400 batches 600 batches Engineering costs $ 68,000 900 engineering hours 800 engineering hours 1,700 engineering hrs. 2,000 direct labor hours 2,900 direct labor hours Maintenance costs $ 43,500 900 direct labor hours Total $ 117,500 Calculate the overhead cost per Wheelbarrow and per Cart using an activity-based costing system