Springs Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the most popu¬ lar. The following data have been gathered for these two products:

Required:
1. Compute the overhead cost per unit for each product using a plantwide, unit-based rate.
2. Compute the overhead cost per unit for each product using departmental rates. In cal¬
culating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Repeat using direct labor hours for Department 1 and machine hours for Department 2.
3. Compute the overhead cost per unit for each product using activity-based costing. (Use overhead pools where possible.)
4. Comment on the ability of departmental rates to improve the accuracy of product costing.

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Units produced per year Prime costs Direct labor hours Machine hours Production runs Inspection hours Product-Related Data Scientific Business 30,000 300,000 $100,000 $1,000,000 40,000 400,000 20,000 200,000 40 60 800 1,200