1. Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available:

   Macaroon Sugar Buttercream

   Projected sales in units 500,000 800,000 600,000

   Per Unit data:

   Selling price $0.80 $0.75 $0.60

   Direct materials $0.20 $0.15 $0.14

   Direct labour $0.04 $0.02 $0.02

   Overhead cost based on direct labour

   hours (traditional system) $0.30 $0.15 $0.15

   Hours per 1,000-unit batch:

   Direct labour hours 2 1 1

   Oven hours 1 1 1

   Packaging hours 0.5 0.5 0.5

   Total overhead costs and activity levels for the year are estimated as follows:

   Activity Overhead costs Activity levels

   Direct labour 2,400 hours

   Oven 210,000 1,900 oven hours

   Packaging $150,000 950 packaging hours

   $360,000

   Required:

   a. Using the traditional (simple) costing system, determine the operating profit per unit for the sugar cookie

2. Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available:

   Macaroon Sugar Buttercream

   Projected sales in units 500,000 800,000 600,000

   Per Unit data:

   Selling price $0.80 $0.75 $0.60

   Direct materials $0.20 $0.15 $0.14

   Direct labour $0.04 $0.02 $0.02

   Overhead cost based on direct labour

   hours (traditional system) $0.30 $0.15 $0.15

   Hours per 1,000-unit batch:

   Direct labour hours 2 1 1

   Oven hours 1 1 1

   Packaging hours 0.5 0.5 0.5

   Total overhead costs and activity levels for the year are estimated as follows:

   Activity Overhead costs Activity levels

   Direct labour 2,400 hours

   Oven 210,000 1,900 oven hours

   Packaging $150,000 950 packaging hours

   $360,000

   Required:

   Using the ABC system, for the sugar cookie, compute the estimated overhead costs per unit.