Fanning Electronics produces video games in three market categories commercial, home, and miniature Fanning has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours The company recently implemented an ABC system when it installed computer controlled assembly stations that rendered the traditional costing system ineffective In implementing the ABC system, the company identified the following activity cost pools and cost drivers Category Total Pooled Cost Types of Costs Cost Driver Unit $ 772,200 Indirect labor wages, supplies, factory utilities, machine maintenance Machine hours Batch 484,200 Materials handling, inventory storage, labor for setups,packaging, labeling and shipping, scheduling Number of production orders Product 210,100 Research and development Time spent by research department Facility 503,500 Rent, general utilities, maintenance, facility depreciation, admin salaries Square footage Additional data for each of the product lines follow Commercial Home Miniature Total Direct materials cost $ 36 30 unit $ 24 50 unit $ 30 80 unit Direct labor cost $ 14 60 hour $ 14 60 hour $ 17 10 hour Number of labor hours 6,700 11,200 1,800 19,700 Number of machine hours 14,000 49,000 15,000 78,000 Number of production orders 240 1,900 860 3,000 Research and development time 10 20 70 100 Number of units 18,000 49,000 17,000 84,000 Square footage 18,000 47,000 30,000 95,000 Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base Also determine the combined cost of all three product lines Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs Determine the combined cost of all three product lines Type of Product Total Cost Cost per Unit a Commercial Home Miniature Combined total $0 b Commercial Home Miniature Combined total $0

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Fanning Electronics produces video games in three market categories: commercial, home, and miniature. Fanning has traditionally allocated overhead costs to the three products using the

Fanning Electronics produces video games in three market categories: commercial, home, and miniature. Fanning has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers:

Category	Total Pooled Cost		Types of Costs	Cost Driver
Unit	$	772,200	Indirect labor wages, supplies, factory utilities, machine maintenance	Machine hours
Batch		484,200	Materials handling, inventory storage, labor for setups,packaging, labeling and shipping, scheduling	Number of production orders
Product		210,100	Research and development	Time spent by research department
Facility		503,500	Rent, general utilities, maintenance, facility depreciation, admin. salaries	Square footage

Additional data for each of the product lines follow:

	Commercial			Home			Miniature			Total
Direct materials cost	$	36.30	/unit	$	24.50	/unit	$	30.80	/unit
Direct labor cost	$	14.60	/hour	$	14.60	/hour	$	17.10	/hour
Number of labor hours		6,700			11,200			1,800			19,700
Number of machine hours		14,000			49,000			15,000			78,000
Number of production orders		240			1,900			860			3,000
Research and development time		10	%		20	%		70	%		100	%
Number of units		18,000			49,000			17,000			84,000
Square footage		18,000			47,000			30,000			95,000

Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines.
Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines.