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Chapter 5 - Activity Based Costing In-class Exercise/Homework Hammer Company plans to use activity based costing to determine its product costs lt 2 presently uses a single plantwide factory overhead rate for allocating factory overhead to products, based on direct labor hours. The total factory overhead cost is as follows Factory Overhead 1,225.000 $1,400,000 Production (factory overhead only)1750 Total cost. The company determined that it performed four major activities in the Production Support Department. These activities, along with their budgeted activity costs, are as follows: Production Support Activities Budgeted Activity Cost s 428,750 Production control.... Quality control.. 245,000 183,750 Total $1, 225,000s Hammer estimated the following activity-base usage and units produced for each of its three products: Number of Units 10,000 Direct Labor Hrs.Setups 25,000 10,000 35 320 40 Smart phone....50.000 40,0005 Total cost 52000 15.000 125 125 750 Instructions 1. Determine the factory overhead cost per unit for the LCD TV, tablet, and smart 2. Determine the factory overhead cost per unit for the LCD TV, tablet, and smart phone 3. which method provides more accurate product costing? Why? under the single plantwide factory overbead rate method. Use direct labor hours the activity base. under activity-based costing. Round to two decimal places

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