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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 $24.82 per unit, while product B has been assigned $13.58 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: Activity Driver 12.5 Activity points Cost Pools Cost Drivers Consumption 2,000 16,000 25,000 Costs Machine setup Materials handling Electric power $158,000 Setup hours 112,000 Pounds of materials 25,000 Kilowatt-hours 00:03:14 Skipped 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 5,000 10, $32,000 $41,0ee $41,000 $38,000 Number of setup hours Pounds of materials used Kilowatt-hours 200 1,000 1,000 2,000 4, Required 1. Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.) Cost per Unit Product A Product B
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