APPLY THE CONCEPTS: Assign the costs at the unit level (small batch)

Now that you've determined what the cost calculation is at the batch level, extrapolate this down to the unit level to see precisely how much each unit is costing for any given-sized batch of production. For this purpose, assume that the company is considering taking on a contract for 5,000 units and it currently produces 50 units per machine hour. Assign costs with and without activity-based costing. If an amount is zero, enter "0". Round unit costs to the nearest cent.

	With ABC	Without ABC
Overhead for setting up machine	$500	$0
Number of units in batch	5000	Not applicable
Manufacturing overhead caused by batch setup per unit	$0.10	Not applicable
Manufacturing overhead costs per machine hour	$18	$20
Number of units produced per machine hour	50	50
Manufacturing overhead caused by production per unit	$0.36	$.4
Total manufacturing overhead allocated per unit	$_____	$_____

APPLY THE CONCEPTS: Assign costs at the unit level (large batch)

If the company manufactures 50,000 units and produces 50 units per machine hour, how would the costs look at this batch level?

	With ABC	Without ABC
Overhead for setting up machine	$500	$0
Number of units in batch	50000	Not applicable
Manufacturing overhead caused by batch setup per unit	$0.01	Not applicable
Manufacturing overhead costs per machine hour	$18	$20
Number of units produced per machine hour	50	50
Manufacturing overhead caused by production per unit	$.36	$.4
Total manufacturing overhead allocated per unit	$_____	$_____