Consider the following data for two products of Vigano Manufacturing.

Activity	Budgeted Cost	Activity Driver
Machine setup	$ 12,000	(20 machine setups)
Parts handling	9,600	(16,000 parts)
Quality inspections	14,400	(100 inspections)
Total budgeted overhead	$ 36,000

Unit Information	Product A		Product B
Units produced	1,200	units	240	units
Direct materials cost	$ 22	per unit	$ 32	per unit
Direct labor cost	$ 42	per unit	$ 52	per unit
Direct labor hours	2	per unit	2.50	per unit

1. Using a plantwide overhead rate based on 3,000 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each.

Actual Activity Usage	Product A		Product B
Setups	8	setups	12	setups
Parts	10,000	parts	6,000	parts
Inspections	40	inspections	60	inspections

Required 1 Required 2 Using a plantwide overhead rate based on 3,000 direct labor hours, compute the total product Direct Materials Per Unit Product Cost per Direct Labor Overhead Unit Product A Product B > $ 22 32 $ 42 52 $ Required 1 24 30 $ 88 114 Required 2 a. Compute overhead activity rates Activity Machine setup $ 600.00 per setup Parts handling $ 0.60 per part Quality inspection $ 144.00 per inspection b. Allocate overhead to Product A, B and compute overhead cost per unit Allocated Cost Activity Product A Product B Machine setup $ 12,000 $ Parts handling 1,200 Quality inspection 144 Total allocated cost $ 13,344 Units produced Overhead cost per unit $ 13.80 c. Product cost per unit using activity-based costing Product Cost Per Unit per Unit Product A Product B $ Activity Rate 88 x 77.80 165.00 8 x 240 X 81 X 329