In the current system, overhead is applied based on an estimate of 50.000.000 of annual overhead and $10.000.000 of direct labor cost. The consultants have broken $50.000.000 of anneal overhead down into six cont pools and identified related cost drivers as indicated in Exhibit 1. The consultants have also found that the monitor and analyzer make use of the cost drivers as indicated in Exhibit 2 Exhibit : Cestpools and drivers Cast Poole Annual Cost Annual Driver Volume 9.000 Product design 160,000 design hours Material ordering and handling 10,000.00 125.000 unique parts Inspection 2.500,000 560,000 inspections Setup 3,500,000 80,000 stupe Labor related overhead 8,000,000 $10,000,000 direct labor Depreciation of plant and equipment 18.000.000 225,000 machine hours 50,000,000 Exhibit 2: Use of cost drivers The following values relate to the entire order of 900 monitors (this is not per monitor): The following values relate to the order of 1 analyzer Number of design hours Number of unique parts Number of inspections Number of setups Machine hours 47 17 225 1 112 110 25 20 1 7. Required: 1. Based on the consultants' work to date, calculate the ABC cost per unit of monitor and analyzer. 2. The consultants have completed their job, and Sarif Industries has adopted an ABC system as indicated in Exhibit 1. Recently, the company received an order for a unique data-storage device. The device will require $9,000 of components and $3,000 of direct labor along with the following requirements: In the current system, overhead is applied based on an estimate of 50.000.000 of annual overhead and $10.000.000 of direct labor cost. The consultants have broken $50.000.000 of anneal overhead down into six cont pools and identified related cost drivers as indicated in Exhibit 1. The consultants have also found that the monitor and analyzer make use of the cost drivers as indicated in Exhibit 2 Exhibit : Cestpools and drivers Cast Poole Annual Cost Annual Driver Volume 9.000 Product design 160,000 design hours Material ordering and handling 10,000.00 125.000 unique parts Inspection 2.500,000 560,000 inspections Setup 3,500,000 80,000 stupe Labor related overhead 8,000,000 $10,000,000 direct labor Depreciation of plant and equipment 18.000.000 225,000 machine hours 50,000,000 Exhibit 2: Use of cost drivers The following values relate to the entire order of 900 monitors (this is not per monitor): The following values relate to the order of 1 analyzer Number of design hours Number of unique parts Number of inspections Number of setups Machine hours 47 17 225 1 112 110 25 20 1 7. Required: 1. Based on the consultants' work to date, calculate the ABC cost per unit of monitor and analyzer. 2. The consultants have completed their job, and Sarif Industries has adopted an ABC system as indicated in Exhibit 1. Recently, the company received an order for a unique data-storage device. The device will require $9,000 of components and $3,000 of direct labor along with the following requirements
