The Tunney Company produces three products, Normal, Enhanced, and Super. The Company uses a costing system that accumulates all overhead in a single cost pool and allocates it based on direct labor hours. Tunney's management has decided to implement ABC. A study revealed that significant amounts of batch-level overhead cost are incurred in requisitioning, retrieving, moving, and handling materials. The number of material requisitions was selected as the activity driver for this cost pool, and direct labor hours will still be used as the allocation base for all remaining overhead cost. Information concerning Tunney Company's most recent year of operations is as follows:

Required:
(1) Calculate the total and per-unit costs reported for each product by the existing costing system, using the format shown in Exhibit 14-3.
(2) Calculate the total and per-unit costs reported for each product by the ABC system, using the format shown in Exhibit 14-4.
(3) Reconcile the costs reported for Super by the two costing systems. Use columns for total and per-unit costs.
(4) What percentage of Tunney's overhead is treated differently by the costing systems? By what percentage did the cost of Super change as a result of the change in the system?

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Normal Enhanced STotal 3 Units produced. Direct material: 30,000 1,000 50 31,050 Cost per unit $ 20 $100 $5,000 85,000 Direct labor: Hours per unit... Total hours.... Total cost (average pay rates differ) 1.5 nit45.000 setups . Design changes. Material pounds.. Material requisitions. 4.5 4,500 $300,000 $35,000 100 10 4,100 200 150 12 26,900 150 10 500 $5,000 50 10 1,800 150 50,000 340,000 300 32 32,800 500 Overhead: Batch level Other... $ 400,000 600,000 Total overhead.... $1,000,000