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 $301,600. During that time, the company produced 13,600 units of the M-008 and 2,100 units of the M-123. The direct costs of production were as follows:

	M-008		M-123		Total
Direct materials	$	108,800	$	84,000	$	192,800
Direct labor		108,800		42,000		150,800

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

$

129,600

8,000

2,000

10,000

Number of production runs

80,000

20

20

40

Number of inspections

92,000

30

40

70

Total overhead

$

301,600

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.)

	M-008	M-123
Total overhead
Total unit cost

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.)

	M-008	M-123
Total overhead
Total unit cost