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Question: selfstudy problem 51 volumebased costing versus abc carter company manufactures...

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Self-Study Problem 5-1 Volume-Based Costing versus ABC Carter Company manufactures two products, Deluxe and Regular, and uses a traditional two-stage cost allocation system. The first stage assigns all factory overhead costs to two production departments, A and B, based on machine hours. The second stage uses direct labor hours to allocate overhead to individual products For the current year, the firm budgeted $2,100,000 total factory overhead cost. The $2,100,000 was for the planned levels of machine and direct labor hours shown in the following table Production Department A 8,400 42,000 Production Department B 33,600 21,000 Machine hours Direct labor hours The following information relates to the firms operations for the month of January: Units produced and sold Unit cost of direct materials Hourly direct labor wage rate Direct labor hours in Department A per unit Direct labor hours in Department B per unit Deluxe Regular 1,680 $105.00 $ 42 420 210 $ 25Carter Company is considering implementing an activity-based costing system. Its management accountant has collected the following information for activity cost analysis for the current year: Driver Budgeted Overhead Budgeted Consumption Activity Cost Driver Quantity Deluxe Regular 403.00 1,050 41,160 Material movement 14,700 Number of production runs Number of setups Number of units 32.00 Machine setups Inspections Shipment 840,000 1,234, 800 420 525.00 105.00 53.00 105.00 1,680 210 10,500 Number of shipments os 020s 42 $2,100,000 Required: 1. Calculate the unit cost for each of the two products under the existing volume-based costing system. (Round Regular unit cost to 2 decimal places.) 2. Calculate the overhead per unit of the cost driver under the proposed ABC system. 3. Calculate the unit cost for each of the two products if the proposed ABC system is adopted. (Round your intermediate calculations to 1 decimal place and final answers to 2 decimal places.) 1. Deluxe unit cost Regular unit cost 2. Budgeted overhead 3. Deluxe unit cost Regular unit cost

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