Fairchild, Inc., manufactures two products, Regular and Deluxe, and applies overhead on the basis of direct labor hours. Anticipated overhead and direct labor time for the upcoming accounting period are $3,090,000 and 73,000 hours, respectively. Information about the company's products follows. Regular Estimated production volume: 1,000 units Direct materials cost: $48 per unit Direct labor per unit: 9 hours at $35 per hour Deluxe Estimated production volume: 8,000 units Direct materials cost: $62 per unit Direct labor per unit: 8 hours at $35 per hour Fairchild's overhead of $3,090,000 can be identified with three major activities: order processing ($260,000), machine processing ($2,200,000), and product inspection ($630,000). These activities are driven by number of orders processed, machine hours worked, and inspection hours, respectively. Data relevant to these activities follow. Orders Processed Machine Hours Worked Inspection Hours Regular 120 18,000 8,000 Deluxe 380 26,000 10,000 Total 500 44,000 18,000 Required: A. Compute the pool rates that would be used for order processing, machine processing, and product inspection in an activity-based costing system. B. Assuming use of activity-based costing, compute the unit manufacturing costs of Regular and Deluxe if the expected manufacturing volume is attained. (Round your intermediate calculations and final answers to 2 decimal places.) C. How much overhead would be applied to a unit of Regular and Deluxe if the company used traditional costing and applied overhead solely on the basis of direct labor hours? Which of the two products would be undercosted by this procedure? Overcosted? (Round your intermediate calculations and final answers to 2 decimal places.)

Fairchild, Inc., manufactures two products, Regular and Deluxe, and applies overhead on the basis of direct labor hours. Anticipated overhead and direct labor time for the upcoming accounting period are $3,090,000 and 73,000 hours, respectively. Information about the company's products follows. Regular Estimated production volume: 1,000 units Direct materials cost: $48 per unit Direct labor per unit: 9 hours at $35 per hour Deluxe Estimated production volume: 8,000 units Direct materials cost: $62 per unit Direct labor per unit: 8 hours at $35 per hour Fairchild's overhead of $3,090,000 can be identified with three major activities: order processing ($260,000), machine processing ($2,200,000), and product inspection ($630,000). These activities are driven by number of orders processed, machine hours worked, and inspection hours, respectively. Data relevant to these activities follow.

	Orders Processed				Machine Hours Worked				Inspection Hours
Regular		120				18,000				8,000
Deluxe		380				26,000				10,000
Total		500				44,000				18,000

Required: A. Compute the pool rates that would be used for order processing, machine processing, and product inspection in an activity-based costing system. B. Assuming use of activity-based costing, compute the unit manufacturing costs of Regular and Deluxe if the expected manufacturing volume is attained. (Round your intermediate calculations and final answers to 2 decimal places.) C. How much overhead would be applied to a unit of Regular and Deluxe if the company used traditional costing and applied overhead solely on the basis of direct labor hours? Which of the two products would be undercosted by this procedure? Overcosted? (Round your intermediate calculations and final answers to 2 decimal places.) A.

Order Processing: ___??____ per OP

Machine Processing: ___??____ Per MH

Product inspection: _____??____ per IH

B. Activity Based Costing:

Regular:___??____

Deluxe:___??____

C. Traditional costing:

Regular:___??____ Overcosted/Undercosted

Deluxe:____??___ Overcosted/Undercosted