Consider the following data for two products of Vigano Manufacturing.

Activity Budgeted Cost Activity Driver

Machine setup $ $17,000(20$ machine setups$)$

Parts handling $13,600(16,000$ parts$)$

Quality inspections $20,400(100$ inspections$)$

Total budgeted overhead $ $51,000$

Unit Information Product A Product B

Units produced $1,700$ units $340$ units

Direct materials cost $ $27$ per unit $ $37$ per unit

Direct labor cost $ $47$ per unit $ $57$ per unit

Direct labor hours $2$ per unit $2\mathrm{.}50$ per unit

$1.$ Using a plantwide overhead rate based on $4,250$ 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

PART A:Using a plantwide overhead rate based on $4,250$ direct labor hours, compute the total product cost per unit for each product.

PART B: 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. $($Round your final answers to $2$ decimal places.$)$

Answer rating: 100% (QA)

PART A Using a plantwide overhead rate based on 4250 direct labor hours compute the total product cost per unit for each product To calculate the total product cost per unit using the plantwide overhe... View the full answer