# sub-question 1 and 2 : Rascon Parcel Unit product cost 2. Management is considering an ABC system in which half of the overhead would continue

sub-question 1 and 2 : Rascon
Parcel
Unit product cost
2. Management is considering an ABC system in which half of the overhead would continue to be allocated on the basis of direct
labour-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows
during the upcoming year:
Rascon
Parcel
Total
Engineering design time (in hours)
5,800
2,900
8,700
Compute the unit product costs for the two products using the proposed ABC system. (Do not round intermediate calculations and
Rascon
Parcel
Unit product cost : Harrison Company makes two products and uses a conventional costing system in which a single plantwide, predetermined overhead
rate is computed based on direct labour-hours. These products are customized to some degree for specific customers. Data for the
two products for the upcoming year follow:
Rascon
Parcel
Direct materials cost per unit
Direct labour cost per unit
Direct labour-hours per unit
Number of units produced
\$ 29.70 \$ 22.90
2\$
28.80 \$
4.40
0.90
0.40
32,000
119,000
Required:
1. The company’s manufacturing overhead costs for the year are expected to be \$866,000. Using the company’s traditional costing
system, compute the unit product costs for the two products. (Do not round intermediate calculations and round your final answers
to 2 decimal places.)
Rascon
Parcel
Unit product cost
2. Management is considering an ABC system in which half of the overhead would continue to be allocated on the basis of direct
labour-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows
during the upcoming year:

(550 words)

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