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Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $26.98 per unit, while product B has been assigned $15.22 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Machine setup Materials handling Electric power Activity Costs $ 172,000 162,000 62,000 Cost Drivers Setup hours Pounds of materials Kilowatt-hours Activity Driver Consumption 2,eee 18,000 31,000 The following cost information pertains to the production of A and B, just two of Hakara's many products: Number of units produced Direct materials cost Direct labor cost Number of setup hours Pounds of materials used Kilowatt-hours A B 4,000 1 10,000 $23,000 $38,000 $28,000 $37,000 100 200 2,000 2,000 2,000 4,000 Required: 1. Use activity-based costing to determine a unit cost for each product. (Round your final ans to 2 decimal places.) Cost per Unit Product A Product B
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