Husky Ladder Corporation manufactures two small stepladders, Regular and Deluxe. Deluxe ladders were added as...
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Husky Ladder Corporation manufactures two small stepladders, Regular and Deluxe. Deluxe ladders were added as a product line three years ago. Deluxe ladders are the more complex of the two products as they are extendable, requiring one (1.0) hour of direct labour time per unit to manufacture, compared to one-half (0.5) hour of direct labour time for Regular ladder. Indirect costs are currently allocated to the products on the basis of direct labour hours. The company estimated it would incur $332,500 in manufacturing overhead costs and produce 6,000 units of Deluxe ladders and 20,000 units of Regular ladders during the current year. Unit costs for materials and direct labour are:
Regular Deluxe
Direct labour: $ 9 $ 18
Direct materials: $ 12 $ 16
Required: Determine the unit cost of the two products using traditional costing with direct labour hours as the allocation base (show your work).
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