I already know part 1- see answer. Please assist with part 2. Thank you!
Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:
Mercon Wurcon
Direct materials cost per unit $ 12.30 $ 22.20
Direct labor cost per unit $ 5.50 $ 2.50
Direct labor-hours per unit 0.46 0.28
Number of units produced 18,000 80,000
These products are customized to some degree for specific customers.
Required:
1. The company's manufacturing overhead costs for the year are expected to be $748,592. Using the company's conventional costing system, compute the unit product costs for the two products. (Do not round intermediate calculation. Round your final answers to 2 decimal places.)
Mercon Wurcon
Unit product cost $ $
ANSWER: MERCON: $29.02 WURCON: $31.53
2. Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-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:
Mercon Wurcon Total
Engineering design time (in hours) 3,000 3,200 6,200
Compute the unit product costs for the two products using the proposed ABC system. (Round your final answers to 2 decimal places.)
Mercon Wurcon
Unit product cost $ $