Neylon Company produces mathematical and financial calculators and operates at capacity. Data related to the two products follows. Requirements 1. Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product. E (Click the icon to view the data.) 2. Compute the manufacturing cost per unit for each product. How might Neylon's managers use the new cost information from its activity-based costing system to better manage its business? Total manufacturing overhead costs are: 3. Total 2$ Machining costs 450,000 Setup costs 120,000 Inspection costs 100,000 Begin by choosing a cost driver for each overhead cost pool. Cost driver Activity Rate 6 per machine-hour Machine-hours 2$ Machining $ 600 per production run Production runs Set up 100 per inspection-hour Inspection-hours Inspection Data Table Determine the formula to calculate the overhead allocated to each product. Overhe Indirect-cost rate Product quantity of allocation base Mathematical Financial Now calculate the total overhead allocated to each product and the overhead cost per unit. (Round 100,000 200,000 Annual production in units Mathematical 300.000 $ Direct materials cost 600,000 Machining costs 100.000 $ Direct manufacturing labor cost 200,000 Setup costs Direct manufacturing labor-hours 5,000 10,000 Inspection costs Machine-hours 25,000 50,000 Total overhead costs Number of production runs 100 100 Divide by number of units Inspection hours 700 300 Manufacturing overhead cost per unit