Jay Krue makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells and whistles. The company has always allocated overhead costs to products based on machine hours. Last year, the company implemented an activity-based costing system, and managers determined the following activity pools and rates based on total overhead of $1,408,000:

Rate
Assembly	$1.25per direct labor hour
Fabrication	$9.75per machine hour
Setups	$18per batch
Bonding	$85,200direct to Complex

Only the Complex product requires bonding, so all the costs of bonding should be allocated to Complex. The following data relate to both products.

Simple	Complex
Units produced	127,000	50,000
Direct labor hours	231,000	101,000
Machine hours	50,000	30,000
Batches	2,300	4,800

Using the traditional method of allocating overhead costs,

	allocate overhead cost to the products.
	show that the overhead assigned to each product sums to the total company overhead.
	determine the overhead cost per unit for each product.

(Round per unit answers to 2 decimal places, e.g. 15.25.)

Simple	Complex	Total
Machine hours
Overhead rate	$	$
Total overhead to product	$	$	$

Simple	Complex
Total overhead to product	$	$
Number of units produced
Overhead per unit	$	$

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Using the activity-based costing rates,

	allocate overhead cost to the products.
	show that the overhead assigned to each product sums to the total company overhead.
	determine the overhead cost per unit for each product.

(Round per unit answers to 2 decimal places, e.g. 15.25)

Simple	Complex	Total
Assembly	$	$
Fabrication
Setups
Bonding
Total overhead	$	$	$

Simple	Complex
Total overhead to product	$	$
Number of units produced
Overhead per unit	$	$