Swenson Company manufactures 4,000 units of Deluxe Product and 20,000 units of Regular Product each year. The company currently uses direct labor-hours to assign overhead cost to products. The pre-determined overhead rate is: Suppose, however, that factory overhead costs are actually caused by the five activities listed below: Also suppose the following transaction data has been collected: Required:
Using the activity-based costing method to calculate unit costs of Deluxe and Regular products, and compare them with the current direct labor hours-based costing system.

Question

Swenson Company manufactures 4,000 units of Deluxe Product and 20,000 units of Regular Product each year. The company currently uses direct labor-hours to assign overhead cost to products. The pre-determined overhead rate is:   Suppose, however, that factory overhead costs are actually caused by the five activities listed below:  Also suppose the following transaction data has been collected:  Required:
Using the activity-based costing method to calculate unit costs of Deluxe and Regular products, and compare them with the current direct labor hours-based costing system.

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The Answer of Swenson Company manufactures 4,000 units of Deluxe Product and 20,000 units of Regular Product each year. The company currently uses direct labor-hours to assign overhead cost to products. The pre-determined overhead rate is:   Suppose, however, that factory overhead costs are actually caused by the five activities listed below:  Also suppose the following transaction data has been collected:  Required:
Using the activity-based costing method to calculate unit costs of Deluxe and Regular products, and compare them with the current direct labor hours-based costing system.

Swenson Company Manufactures 4,000 Units of Deluxe Product and 20,000