Question
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant:
Deluxe Regular
Quantity 100,000 800,000
Selling price $900 $750
Unit prime cost $529 $483
In addition, the following information was provided so that overhead costs could be assigned to each product:
Activity Name Activity Driver Deluxe Regular Activity Cost
Setups Number of setups 300 200 $2,000,000
Machining Machine hours 100,000 300,000 80,000,000
Engineering Engineering hours 50,000 100,000 6,000,000
Packing Packing orders 100,000 400,000 100,000
Required:
1. Calculate the overhead rates for each activity. (Round to two decimal places.)
Setups $______ per setup
Machining $______ per machine hour
Engineering $______ per engineering hour
Packing $______ per packing order
2. Calculate the per-unit product cost for each product. (Round to the nearest dollar.)
Deluxe $ _________ per unit
Regular $ ________ per unit
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