Mementos Ltd manufactures two types of expresso machines: Standard and Deluxe. It uses the reciprocal services method to allocate support department costs. Mementos Ltd has two support departments and three production departments, their annual budgeted overhead costs are as follows:

Support Departments
Department	Amount
Quality control	$ 70,000
Information technology	$ 170,000
Production Departments
Department	Amount
Welding	$ 130,000
Machining	$ 270,000
Finishing	$ 190,000

Costs for the quality control department and the information technology department are allocated based on the number of employees and the number of service requests, respectively. Costs for the welding department, the machining department and the finishing department are allocated based on kilowatt-hour, machine hours and direct labour hours, respectively. The annual estimates of these measures broken down by departments are as follows:

	Quality control	Information technology	Welding	Machining	Finishing
Number of employees	6	4	10	8	12
Number of service requests	30	-	80	160	30
Kilowatt-hours	1,400	3,000	11,800	13,000	6,000
Machine hours	-	-	30,000	52,000	8,000
Direct labour hours	-	-	10,000	8,000	30,000

The quality control department only provides services to the three production departments, whereas the information technology provides services to the quality control department and all production departments.

Mementos Ltd plans to produce 14,000 units of Standard and 8,000 units of Deluxe per year. It is estimated that a unit of Standard is produced using 0.50 kilowatt-hour in the welding department, two machine hours in the machining department and one labour hour in the finishing department. It requires direct material costing $600 and direct labour costing $65. A unit of Deluxe is estimated to use 0.60 kilowatt-hour in the welding department, three machine hours in the machining department and two labour hours in the finishing department. It requires direct material costing $1,400 and direct labour costing $140.

Required:

1. Use the reciprocal services method to allocate support department costs.

(a) Calculate the overhead cost per unit of a Deluxe. (12 marks)

b. Calculate the unit product cost of a Deluxe.