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ara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system product A has
ara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system product A has been assigned overhead of $35.29 per unit while product B has been assigned $8.25 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Hak Cost Pools Activity Costs $ 261,000 153,000 Cost Driver Driver Consumption Machine setup Materials handling Electric power Setup hours Pounds of materials 3,000 17,000 38,000 38,000 Kilowatt-hours The following cost information pertains to the production of A and B, just two of its many products Number of units produced Direct materials cost Direct labor cost Number of setup hours Pounds of materials used Kilowatt-hours 4,000 20,000 $37,000 $27,000 $41,000 $40,000 200 2,000 2,000 200 1,000 4,000 Required 1. Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.) Cost per Unit Product A Product B
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