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 $324,000 During that time, the company produced 13,500 units of the M 008 and 2,700 units of the M 123 The direct costs of production were as follows M 008 M 123 Total Direct materials $ 108,000 $ 108,000 $ 216,000 Direct labor 108,000 54,000 162,000 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 $ 144,500 8,000 2,000 10,000 Number of production runs 80,000 20 20 40 Number of inspections 99,500 15 30 45 Total overhead $ 324,000 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 )

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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

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 $324,000. During that time, the company produced 13,500 units of the M-008 and 2,700 units of the M-123. The direct costs of production were as follows:

	M-008		M-123		Total
Direct materials	$	108,000	$	108,000	$	216,000
Direct labor		108,000		54,000		162,000

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	$	144,500		8,000	2,000	10,000
Number of production runs		80,000		20	20	40
Number of inspections		99,500		15	30	45
Total overhead	$	324,000

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.)