Comparing Two Products under Traditional and Activity-Based Costing

Compare two projects under development by the same company. The following are a few aspects of each product's development process relevant to costs.

Product SProduct T Requires 3,840 hours of testingRequires 960 hours of testingRequires 5,250 units of computing powerRequires 2,250 units of computing powerRequires 20 developer hours to implementRequires 80 developer hours to implementCost ItemsCost of Each ActivityTesting:$30,000Computing power:$45,000Developer hourly cost:$11 per hour

Traditional Costing

Traditional costing would take the proportion of a direct cost, such as direct labor hours, and use it as the basis for allocating overhead costs, such as computing power and testing. In the following table, use developer hours as the basis for assigning overhead costs (computing and developer costs) to each project. If required, round your answers to the nearest dollar.

Product SProduct TPercentage of developer hours20%Percentage of developer hours80%Testing cost$Testing cost$Computing cost$Computing cost$Developer cost$Developer cost$Total cost$Total cost$