Geddy, Inc., is a manufacturing firm that manufactures two types of boat engines. The Type A engine is designed for a specific type of cruise ship. Because of a long-term commitment with a cruise company, Type A engines need no modifications. Type B engines are designed for slightly smaller cruise ships. Because the Type B engine is designed for several different models of cruise ships and the mounting hardware is different for each, retooling is regularly required. Costs for the two types of engines are presented here:

Required:
1. Determine the amount of manufacturing overhead to be assigned to each unit of activity assuming the following ABC information:

2. Determine the amount of manufacturing overhead to be assigned to each type of engine.
3. Compute the gross margin on Type A and Type B engines assuming selling prices of $2,000,000 and $2,300,000,respectively.

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Type B Engine (90 Units Produced) Type A Engine (200 Units Produced) Per Unit Total Per Unit Total Direct materials cost. Direct labor cost.. Manufacturing overhead costs: Engineering costs Quality control. Utilities and maintenance $176,000,000 $880,000 $70,200,000 S780,000 670,000 60,300,000 $144,000,000 1,305,000