Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Mercon Wurcon
Direct materials cost per unit $10.00 $8.00
Direct labor cost per unit $3.00 $3.75
Direct labor-hours per unit 0.20 0.25
Number of units produced 10,000 40,000

These products are customized to some degree for specific customers.

Required:
a. The company's manufacturing overhead costs for the year are expected to be $336,000. Using the company's conventional costing system, compute the unit product costs for the two products.
b. Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:

Mercon Wurcon Total
Engineering design time (in hours) 4,000 4,000 8,000

Required:
Compute the unit product costs for the two products using the proposed ABC system.

Reliability and validity reliability and validity are two important considerations that must be made with any type of data collection. reliability refers to the ability to consistently produce a given result. in the context of psychological research, this would mean that any instruments or tools used to collect data do so in consistent, reproducible ways. unfortunately, being consistent in measurement does not necessarily mean that you have measured something correctly. to illustrate this concept, consider a kitchen scale that would be used to measure the weight of cereal that you eat in the morning. if the scale is not properly calibrated, it may consistently under- or overestimate the amount of cereal that’s being measured. while the scale is highly reliable in producing consistent results (e. g., the same amount of cereal poured onto the scale produces the same reading each time), those results are incorrect. this is where validity comes into play. validity refers to the extent to which a given instrument or tool accurately measures what it’s supposed to measure. while any valid measure is by necessity reliable, the reverse is not necessarily true. researchers strive to use instruments that are both highly reliable and valid.