Refer to the data in Exercises 7-7

and 7-9.

Carson Weeks found that the budget included production of 500 units of Component 3F5 and 5,000 units of Component T76.

Required

a. Calculate the overhead cost per unit of Component 3F5 and Component T76 under traditional costing using machine hours as the overhead application base.

b. Calculate the overhead cost per unit of Component 3F5 and Component T76 under activity-basedcosting.

Transcribed Image Text:

Cost Pool Expected Activities Expected Cost Product assembly Machine setup and calibration Product inspection Raw materials storage 40,000 machine hours 2,000 setups 1,500 batches 500,000 pounds $ 350,000 120,000 100,000 $