Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the companys two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters.

Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $307,200. During that time, the company produced 14,200 units of the M-008 and 2,000 units of the M-123. The direct costs of production were as follows:

	M-008		M-123		Total
Direct materials	$	113,600	$	80,000	$	193,600
Direct labor		113,600		40,000		153,600

Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows:

			Activity Level
Cost Driver		Costs		M-008		M-123		Total
Number of machine-hours	$	117,700		1,000		9,000		10,000
Number of production runs		90,000		20		20		40
Number of inspections		99,500		20		35		55
Total overhead	$	307,200

Required:

a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? (Round your intermediate calculations and final answers to 2 decimal places.)

b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? (Round "Total unit cost" to 2 decimal places.)

2.

University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing). Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each.

The following data appear in the company records for the current period:

	Maintenance			Personnel			Printing			Developing
Machine-hours					1,600			1,600			4,800
Labor-hours		700						700			3,300
Department direct costs	$	4,400		$	14,400		$	15,500		$	12,900

Required:

Use the direct method to allocate these service department costs to the operating departments. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.)

3.

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:

	Standard Quantity or Hours		Standard Price or Rate			Standard Cost
Direct materials	7.80	pounds	$	2.30	per pounds	$	17.94
Direct labor	0.30	hours	$	8.00	per hour	$	2.40

During the most recent month, the following activity was recorded:

a.	25,900 pounds of material were purchased at a cost of $2.10 per pound.
b.	All of the material purchased was used to produce 3,000 units of Zoom.
c.	700 hours of direct labor time were recorded at a total labor cost of $6,300.

Required:

1.	Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

2.	Compute the labor rate and efficiency variances for the month.