Amazon.com Inc. has the following cost information for its product lines: Echo, Kindle, and Fire:

• Echo:
  • Direct Materials: $10,000,000
  • Direct Labor: $5,000,000
  • Overhead Rate: 160%
• Kindle:
  • Direct Materials: $8,000,000
  • Direct Labor: $4,000,000
  • Overhead Rate: 160%
• Fire:
  • Direct Materials: $6,000,000
  • Direct Labor: $3,000,000
  • Overhead Rate: 160%

Requirements:

1. Compute the total cost for each product line.
2. Determine the overhead costs applied to each product line.
3. Prepare a cost summary report for Amazon.com Inc.
4. Calculate the cost per unit if 200,000 units of Echo, 300,000 units of Kindle, and 150,000 units of Fire were produced.
5. Discuss the impact of overhead allocation on product pricing and profitability.