CableTech Bell Corporation (CTB) operates in the telecommunications industry. CTB has two divisions: the Phone Division and the Cable Service Division. The Phone Division manufactures telephones in two plants located in the Midwest: (1) a conventional phone plant and (2) cellular phone plant. The product lines run from relatively inexpensive touch-tone wall and desk phones to expensive, high quality cellular phones. CTB also operates a cable TV service in Ohio. The Cable Service Division offers three products: a basic package with 25 channels; an enhanced package which is the basic package plus 15 additional channels and two movie channels; and a premium package which is the basic package plus 25 additional channels and three movie channels.

The Cable Service Division reported the following sale and unit cost activity for the month of March:

The unit costs are divided as follows: 70 percent production and 30 percent marketing and customer service. Direct labor cost is the only cost driver used for tracing. Typically, the Cable Service Division uses only production costs to define unit costs. The preceding unit product cost information was provided at the request of the marketing manager, Dan Moniker, and was the result of a special study.

Bryce Youngers, the President of CTB, is reasonably satisfied with the March performance of the Cable Service Division. The March numbers were fairly typical of what has been happening over the past two years. The Phone Division, however, is another matter as its overall profit performance has been declining. Two years ago the Phone Division's income before income taxes was about 15 percent of sales. March's dismal performance was typical of the entire calendar year. This performance trend is expected to continue unless management takes actions to reverse it. During March, the Phone Division reported the following results:

During March, the Phone Division purchased materials totaling $312,000. There are no significant inventories of supplies (beginning or ending). Supplies are accounted for separately from materials. CTB's Phone Division had sales totaling $1,170,000 for the month of March.

After receiving the internal memo, Kim asked Jacob to use the same plant as a pilot for a preliminary ABC analysis. She instructed him to assign all overhead costs to the plant's two products (Regular and Deluxe phone-models), using only four activities. The four activities were:(1) rework, (2) moving materials, (3) inspecting products, and (4) a general catch-all manufacturing activity labeled "other activities". Based on the special study, Kim knew that material handling and inspecting involved significant cost. In addition, based on data from production reports, the rework activity involved significant cost. If the ABC and unit-based cost assignments did not differ by breaking out these three major activities, then ABC may not matter (currently direct labor cost is used to assign overhead to products).

Pursuant to Kim's request, Jacob produced the following cost and driver information:

CableTech Bell Corporation Cable Service Division For the Month Ended March, 20XX Basic Enhanced Premium 50,000 $16 500,000 $30 300,000 $40 Sales (units) Price per unit Unit costs: Directly traced Driver traced $3 $2 $10 $5 $4 $13 $7 $6 $15 Allocated CableTech Bell Corporation Phone Division For the Month of March, 20xx Inventories: Materials, March 1 $23,000 Materials, March 31 40,000 Work in process, March 1 Work in process, March 31 130,000 45,000 480,000 375,000 Finished goods, March 1 Finished goods, March 31 Costs: Direct labor $117,000 Plant and equipment depreciation Material handling Inspections 50,000 85,000 60,000 30,000 30,000 12,000 Scheduling Power Plant supervision Manufacturing engineering 21,000 120,000 Sales commissions Salary, sales supervisor Supplies 10,000 17,000 40,000 30,000 Warranty work Rework Activity Expected Cost Driver Activity Capacity 1,520 $152,000 360,000 Rework hours Number of moves 7,200 Reworking Moving Materials Inspecting Other Activities 288,000 Inspection hours 9,600 $800,000 Direct labor dollars $500,000 Total Overhead Cost $1,600,000 Expected activity demands: Regular Model Deluxe Model Units completed 40,000 16,000 Direct materials $200,000 $160,000 Direct labor dollars $350,000 $150,000 Number of moves 2,880 4,320 Inspection hours 2,400 Rework hours 760 760 7,200 Required: 1. Calculate the overhead cost per unit for each phone model using direct labor cost to assign all overhead costs to products (round overhead rate to nearest cent). Regular Model: $ per unit Deluxe Model: $ per unit 2. Calculate the overhead cost per unit for each phone model using the four activities and drivers identified by Kim (round activity rates and final answers to the nearest cent, use the rounded answers in subsequent requirements, if required.) Regular Model: $ per unit Deluxe Model: $ per unit 3. Calculate the conversion cost per unit using activity-based assignments (round activity rates and final answers to the nearest cent, use the rounded answers in subsequent requirements, if required): Regular Model: $ per unit Deluxe Model: $ per unit 4. Calculate the prime cost per unit (round prime cost to the nearest cent): Regular Model: $ per unit Deluxe Model: $ per unit 5. Calculate the unit manufacturing cost using direct labor dollars to assign overhead (round overhead rate to the nearest cent): per unit Regular Model: $ Deluxe Model: $ per unit 6. Calculate the unit manufacturing cost using activity-based assignments (round intermediate and final answers to the nearest cent): Regular Model (round to the nearest cent): $ per unit Deluxe Model (round to the nearest cent): $ per unit Summary Questions: 1. Using the ABC assignments as the benchmark, the unit manufacturing cost for the Regular model is currently - Select your answer by $ . 2. If the unit product cost of the Regular model is - Select your answer then the selling price could be - Select your answer - making the company - Select your answer - competitive. 3. If Kim wants to know the unit operating product cost, then the costs of the additional activities must also be assigned to the products (Select "Yes" if the activity should be assigned to the products, else please select "No" from the below dropdowns.) Scheduling - Select your answer - Y Power - Select your answer - Engineering - Select your answer - Warranty - Select your answer - Sales commissions - Select your answer - Sales supervision 1 - Select your answer - Plant supervision - Select your answer - CableTech Bell Corporation Cable Service Division For the Month Ended March, 20XX Basic Enhanced Premium 50,000 $16 500,000 $30 300,000 $40 Sales (units) Price per unit Unit costs: Directly traced Driver traced $3 $2 $10 $5 $4 $13 $7 $6 $15 Allocated CableTech Bell Corporation Phone Division For the Month of March, 20xx Inventories: Materials, March 1 $23,000 Materials, March 31 40,000 Work in process, March 1 Work in process, March 31 130,000 45,000 480,000 375,000 Finished goods, March 1 Finished goods, March 31 Costs: Direct labor $117,000 Plant and equipment depreciation Material handling Inspections 50,000 85,000 60,000 30,000 30,000 12,000 Scheduling Power Plant supervision Manufacturing engineering 21,000 120,000 Sales commissions Salary, sales supervisor Supplies 10,000 17,000 40,000 30,000 Warranty work Rework Activity Expected Cost Driver Activity Capacity 1,520 $152,000 360,000 Rework hours Number of moves 7,200 Reworking Moving Materials Inspecting Other Activities 288,000 Inspection hours 9,600 $800,000 Direct labor dollars $500,000 Total Overhead Cost $1,600,000 Expected activity demands: Regular Model Deluxe Model Units completed 40,000 16,000 Direct materials $200,000 $160,000 Direct labor dollars $350,000 $150,000 Number of moves 2,880 4,320 Inspection hours 2,400 Rework hours 760 760 7,200 Required: 1. Calculate the overhead cost per unit for each phone model using direct labor cost to assign all overhead costs to products (round overhead rate to nearest cent). Regular Model: $ per unit Deluxe Model: $ per unit 2. Calculate the overhead cost per unit for each phone model using the four activities and drivers identified by Kim (round activity rates and final answers to the nearest cent, use the rounded answers in subsequent requirements, if required.) Regular Model: $ per unit Deluxe Model: $ per unit 3. Calculate the conversion cost per unit using activity-based assignments (round activity rates and final answers to the nearest cent, use the rounded answers in subsequent requirements, if required): Regular Model: $ per unit Deluxe Model: $ per unit 4. Calculate the prime cost per unit (round prime cost to the nearest cent): Regular Model: $ per unit Deluxe Model: $ per unit 5. Calculate the unit manufacturing cost using direct labor dollars to assign overhead (round overhead rate to the nearest cent): per unit Regular Model: $ Deluxe Model: $ per unit 6. Calculate the unit manufacturing cost using activity-based assignments (round intermediate and final answers to the nearest cent): Regular Model (round to the nearest cent): $ per unit Deluxe Model (round to the nearest cent): $ per unit Summary Questions: 1. Using the ABC assignments as the benchmark, the unit manufacturing cost for the Regular model is currently - Select your answer by $ . 2. If the unit product cost of the Regular model is - Select your answer then the selling price could be - Select your answer - making the company - Select your answer - competitive. 3. If Kim wants to know the unit operating product cost, then the costs of the additional activities must also be assigned to the products (Select "Yes" if the activity should be assigned to the products, else please select "No" from the below dropdowns.) Scheduling - Select your answer - Y Power - Select your answer - Engineering - Select your answer - Warranty - Select your answer - Sales commissions - Select your answer - Sales supervision 1 - Select your answer - Plant supervision - Select your