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Mikoo, Inc. manufactures a product that uses $15 in direct materials and $8 in direct labor per unit. Under the traditional costing system Mikoo uses, manufacturing overhead applied to each unit is $13. Mikoo is considering switching to an ABC system, however. Under the ABC system, the total activity cost would be $26. What is the total manufacturing cost per unit for Mikoo under the ABC system? Solution Mikoo, Inc. manufactures a product that uses $15 in direct materials and $8 in direct labor per unit. Under the traditional costing system Mikoo uses, manufacturing overhead applied to each unit is $13. Mikoo is considering switching to an ABC system, however. Under the ABC system, the total activity cost would be $26. What is the total manufacturing cost per unit for Mikoo under the ABC system? Answer $ 49 .

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