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National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units 11,200 17,200
National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units 11,200 17,200 High F Great P National uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows: Direct materials Direct labor High F $39.20 $18.80 Great P $26.60 $14.40 Budget factory overhead: Engineering and Design Quality Control Machinery Miscellaneous Overhead Total 2,640 engineering hours 13,070 inspection hours 33,950 machine hours 26,630 direct labor hours $ 462,000 324,000 642,960 159, 120 $1,588,080 National's controller had been researching activity-based costing and decided to switch to it. A special study determined National's two products have the following budgeted activities: Engineering and design hours Quality control inspection hours Machine hours Labor hours High F Great P 1,080 1,560 5,760 7,310 20,400 13,550 12,120 14,510 Using activity-based costing, total overhead per unit of the High F model is: (Rounded to the nearest cent.) $46.37. $49.90. $65.15. $70.58. $175.00
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