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Exercise 5-7A (Algo) Comparing an ABC system with a traditional costing system LO 5-1, 5-3 Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Cost Pool Total $117,000 197,000 Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Total overhead cost Cost Driver Number of units produced Number of programming hours Number of inspections Number of tests 23,000 27,000 $364,000 Expected activity for each product follows: Number of Programming Hours 2,700 2,300 Number of Units 19,500 45,500 65,000 Decoder P Decoder o Total Number of Inspections 380 120 500 Number of Tests 2,520 1,980 5,000 4,500 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: Decoder P Decoder o Total Direct Labor Hours 7,800 18, 200 26,000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. (Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole dollar amount.) Allocated Cost Decoder P Decoder Q Total $ 0 Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. (Round intermediate calculations and final answers to 2 decimal places.) Cost per unit Decoder P Method Decoder ABC Labor hours { Required A Required B

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