Exercise $17-11($Algo$)$ Computing product cost per unit using plantwide method and activity$-$based costing LO P$1,$ P$3$

Consider the following data for two products of Vigano Manufacturing.

Activity Budgeted Cost Activity Driver

Machine setup $ $24,000(20$ machine setups$)$

Parts handling $19,200(16,000$ parts$)$

Quality inspections $28,800(100$ inspections$)$

Total budgeted overhead $ $72,000$

Unit Information Product A Product B

Units produced $2,400$ units $480$ units

Direct materials cost $ $34$ per unit $ $44$ per unit

Direct labor cost $ $54$ per unit $ $64$ per unit

Direct labor hours $2$ per unit $2\mathrm{.}50$ per unit

$1.$ Using a plantwide overhead rate based on $6,000$ direct labor hours, compute the total product cost per unit for each product.

$2.$ Consider the following additional information about these two products. If activity$-$based costing is used to allocate overhead cost, $($a$)$ compute overhead activity rates, $($b$)$ allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and $($c$)$ compute product cost per unit for each.

Actual Activity Usage Product A Product B

Setups $8$ setups $12$ setups

Parts $10,000$ parts $6,000$ parts

Inspections $40$ inspections $60$ inspections