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XYZ company has the following data from its costing system regarding its two product line, A1 and B1:

Using a traditional system, the company would apply manufacturing overhead to the units based on direct labor-hours for the upcoming period as follows:

Using an activity-based costing system, the company would assign manufacturing overhead to the following four activity cost pools. The other cost pool includes orginization-sustaunung costing and idle capacity costa and idle capacity costs.

1. Compue product margind for the A1 and B1 products using the traditional costing system.

2. Compue product margind for the A1 and B1 products using theactivity-based costing system.

3. Based on your analysis above, estimate how much manfacturing overhead was allocated under the trasition costing system to (1) batch setups, and (2) product sustaining activities for A1 and B1.

Selling price per unit Direct materials per unit DIrect labor per unt Direct labor hours per unit Estimated annual production and sales A1 $140 $72 $24 2.0 DL Hrs 20,000 units B1 $99 $53 $12 10 DL Hrs 80,000 units Estimated total manufacturing overhead Estimated total direct labor-hours $1,980,000 20,000 DL Hrs Cost Activity Level Activity Level Activity Level $783 $495 S602 $99 $1,980 80 120 200 Product sustaining (number of products) Other Total manufacturing overhead cost NA NA

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