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Cabell Company manufactures two products, Product C and Product D. The company estimated it would incur $113,600 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period's operations appear below:

	Product C	Product D
Estimated volume	2,400 units	1,000 units
Direct materials cost per unit	$10.00	$20.00
Direct labor hours per unit	0.50 hours	0.80 hours

The average direct labor cost is $20 per hour.

a. Compute the predetermined overhead rate under the current method, and determine the TOTAL PER UNIT cost of each product for the current year.

POHR: _________

Cost of Product C: _________

Cost of Product D: _________

b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below:

		Expected Activity
Activity cost pool	Est. O/H Cost	Product C	Product D	Total
Machine setups	$8,100	120	150	270
Purchase orders	84,500	630	1,060	1,690
General factory	21,000	700	1400	2,100
	113,600

Determine the TOTAL PER UNIT cost of each product for the current period using the activity-based costing approach.

Cost of Product C: _________

Cost of Product D: _________

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