National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders.

PART ONE

Model	Annual Sales in Units
High F	10,000
Great P	16,000

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:

	High F			Great P
Direct materials	$	38.00		$	25.40
Direct labor	$	17.52		$	13.14

Budget factory overhead:
Engineering and Design	2,409	engineering hours	$	404,712
Quality Control	12,848	inspection hours		269,808
Machinery	33,726	machine hours		539,616
Miscellaneous Overhead	26,400	direct labor hours		134,904
Total			$	1,349,040

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:

	High F	Great P
Engineering and design hours	969	1,440
Quality control inspection hours	5,648	7,200
Machine hours	20,286	13,440
Labor hours	12,000	14,400

Using activity-based costing, total overhead per unit of Great P model is:

• $42.61.

• $45.99.

• $61.32.

• $66.73.

• $168.00.

PART TWO

The Long Term Care Plus Company has two service departments actuarial and premium rating, and two operations departments marketing and sales. The distribution of each service department's efforts to the other departments is shown below:

FROM	TO
	Actuarial			Rating			Marketing			Sales
Actuarial	0	%		20	%		20	%		60	%
Rating	10	%		0	%		40.0	%		50.0	%

The direct operating costs of the departments (including both variable and fixed costs) were as follows:

Actuarial	$	70,000
Premium Rating	$	30,000
Marketing	$	59,000
Sales	$	83,000

The total cost accumulated in the marketing department using the reciprocal method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):

• $91,857.

• $112,037.

• $120,347.

• $132,106.

• $139,685.