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 $278,400 During that time, the company produced 10,900 units of the M 008 and 2,600 units of the M 123 The direct costs of production were as follows M 008 M 123 Total Direct materials $ 87,200 $ 104,000 $ 191,200 Direct labor 87,200 52,000 139,200 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 $ 100,900 8,000 2,000 10,000 Number of production runs 80,000 10 30 40 Number of inspections 97,500 10 40 50 Total overhead $ 278,400 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 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 Required A Required B 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 Total unit cost to 2 decimal places ) Total overhead Total unit cost M 008 M 123 Required A Required 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 ) Total overhead Total unit cost M 008 M 123

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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 $278,400. During that time, the company produced 10,900 units of the M-008 and 2,600 units of the M-123. The direct costs of production were as follows.

	M-008		M-123		Total
Direct materials	$	87,200	$	104,000	$	191,200
Direct labor		87,200		52,000		139,200

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	$	100,900		8,000	2,000	10,000
Number of production runs		80,000		10	30	40
Number of inspections		97,500		10	40	50
Total overhead	$	278,400

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?

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?

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Required A Required B 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 "Total unit cost" to 2 decimal places.) Total overhead Total unit cost M-008 M-123 Required A Required 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.) Total overhead Total unit cost M-008 M-123