Jackie-O-Ville Delights manufactures two products, truffles and fudge. The company expects to produce and sell 3,200 cases of truffles and 2,100 cases of fudge during the year. Jackie-O-Ville Delights uses activity-based costing to compute overhead costs per product. Data relating to the companys three activity cost pools are given below for the current year:

		Truffles	Fudge
Direct Materials		$5.25	$3.20
Direct Labor		$11.15	$8.95
Activity Cost Pool	Estimated Overhead Costs	Expected Activity
		Truffles	Fudge	Total
Machine Setups	$14,040	260	260	520
Purchase orders	$139,400	1080	2,320	3,400
General Factory	$202,320	7,040	4,200	11,240

Required:

Using the activity-based costing approach, determine the overhead rates for each activity cost pool. 6 points)

Using the above overhead rates determine the overhead cost charged per case to each product (20 points)

Determine the total cost per unit for each product (6 points)

Calculate the cost per unit under the traditional method of allocating overhead using a plant wide predetermined overhead rate using direct labor cost as the activity level.

Calculate the percentage difference in price if the company desires a 40% product profit margin and how it may impact the Truffles and Fudge market.