XYZ Company produces and sells 2 products, Lambda and Gamma, and the production process goes through two departments. Traditionally Manufacturing Overhead (M/O) cost is applied on the basis of direct labor hours (DLH); estimated M/O cost is $ 5,757,500 and the estimated DLH is $12,250 for the most recent period.The team decided to replace traditional plantwide costing system to activity-based costing system. There are 3 activity cost pools which represent 3 activity areas at the plant.
Direct Labor wage rate is $ 30 per hour.
Compute total cost per unit (for lambda and gamma) using traditional plantwide approach. (round your numbers) (The required tables are given below.)
Extracted text: ACTIVITY ESTIMATED M/O COST COST DRIVER Materials Handling Cutting Assembly $ 305,000 $ 3,100,000 $ 2,450,000 Number of parts Number of parts DLH Units Manufactured Total Dir. Material Cost Number of Parts DLH $ 900,000 $ 40,000 Lambda 7,500 150,000 11,250 Gamma 150 5,500 750