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Consider the following data for two products of Vigano Manufacturing. Activity Budgeted Cost Activity Driver Machine setup $ 16,000 (20 machine setups) Parts handling 12,800

Consider the following data for two products of Vigano Manufacturing.

Activity Budgeted Cost Activity Driver
Machine setup $ 16,000 (20 machine setups)
Parts handling 12,800 (16,000 parts)
Quality inspections 19,200 (100 inspections)
Total budgeted overhead $ 48,000

Unit Information Product A Product B
Units produced 1,600 units 320 units
Direct materials cost $ 26 per unit $ 36 per unit
Direct labor cost $ 46 per unit $ 56 per unit
Direct labor hours 2 per unit 2.50 per unit

1. Using a plantwide overhead rate based on 4,000 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

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Using a plantwide overhead rate based on 4,000 direct labor hours, compute the total product cost per unit for each product.

Per Unit Direct Materials Direct Labor Overhead Product Cost per Unit
Product A
Product B

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