1. Carismo Lightning Products manufactures and sells two led bulb models: an economy model and a dimmable one. Setup costs for these products are driven by the number of setups. Allocation base for the equipment and maintenance costs is machine-hours, and square footage of production space allocated within the plant is the allocation base for lease rent.

The following is the budgeted information for Carismo:

Budgeted Costs and Activities For the Year Ended December 31, 2017
Direct materialsEconomy Led Bulbs	$ 170,000
Direct materialsDimmable Led Bulbs	320,000
Direct manufacturing labor Economy Led Bulbs	120,000
Direct manufacturing labor Dimmable Led Bulbs	100,000
Setup	150,000
Equipment and maintenance costs	110,000
Lease rent	240,000
Total	$1,166,700

Other budget information follows:

	Economy Bulbs	Advanced Bulbs
Number of products	50,000	80,000
Machine-hours	12,000	10,000
Number of setups	450	300
Square footage of production space used	3,000	9,000

1. Calculate the budgeted cost per unit of cost driver for each indirect cost pool. (10 points)

Setup Activity Costs
Total Allocation Base (# of setups)
Allocation Rate
Repair & Maintanence Activity Costs
Total Allocation Base (Machine Hours)
Allocation Rate
Lease Rent Activity Costs
Total Allocation Base (square meters used)
Allocation Rate

2. What is the budgeted total cost and the cost per unit of resources used to produce (a) economy led bulbs and (b) dimmable led bulbs? (20 points)

	Economy Bulbs		Advanced Bulbs
Direct materials
Direct manufacturing labour
O/H Allocated
Setup
Repair & Maintenance
Lease Rent
Total Manufacturing Costs
Cost per Unit