Seven Walls Ltd manufactures two products, Stone and Glass. Budgeted overhead and direct labour hours for the upcoming period are $884,500 and 29,000, respectively. The overhead costs are identified with three major activities: order processing $160,000; machine processing $614,500 and product inspection $110,000. Seven Walls pays its labourer on average $20 per hour. Information about the company’s products are as follows:   Stone    Estimated production volume: 5,200    Direct material cost per unit: 25    Direct labour hours per unit: 2 Glass    Estimated production volume: 6,500    Direct material cost per unit: 40    Direct labour hours per unit: 3   Information about the number of inspections, machine hours and order processed are as follows:    Product line Inspection hours Machine hours worked Order processed Stone 1,800 16,100 322 Glass 5,200 19,000 240 Total 7,000 35,100 562   Required: Calculate the unit product costs for Stone and Glass using: Traditional costing, assuming direct labour hours is the allocation base. Activity-based costing.

Seven Walls Ltd manufactures two products, Stone and Glass. Budgeted overhead and direct labour hours for the upcoming period are $884,500 and 29,000, respectively. The overhead costs are identified with three major activities: order processing $160,000; machine processing $614,500 and product inspection $110,000. Seven Walls pays its labourer on average $20 per hour. Information about the company’s products are as follows:

Information about the number of inspections, machine hours and order processed are as follows:

Required:

Calculate the unit product costs for Stone and Glass using:

• Traditional costing, assuming direct labour hours is the allocation base.
• Activity-based costing.