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Example: Long Problem Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented

Example: Long Problem

Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below:

Cost Drivers by Product

Activity Cost PoolCost DriverEst. OverheadBudget Deluxe

Ordering and ReceivingOrders$130,000600400

Machine SetupSetups297,000500400

MachiningMachine hours1,000,000150,000100,000

AssemblyParts1,600,0001,200,000800,000

InspectionInspections300,000550450

Instructions

Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. Round your answer to the nearest cent.

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