Nike Inc. has the following production costs for its footwear lines: Air Max, Air Jordan, and Converse:

• Air Max:
  • Direct Materials: $5,000,000
  • Direct Labor: $2,000,000
  • Overhead Rate: 160%
• Air Jordan:
  • Direct Materials: $6,000,000
  • Direct Labor: $2,500,000
  • Overhead Rate: 160%
• Converse:
  • Direct Materials: $4,000,000
  • Direct Labor: $1,800,000
  • Overhead Rate: 160%

Requirements:

1. Calculate the total cost for each footwear line.
2. Determine the overhead applied to each line.
3. Prepare a detailed cost analysis for Nike Inc.
4. Compute the cost per unit if 100,000 pairs of Air Max, 120,000 pairs of Air Jordan, and 80,000 pairs of Converse were produced.
5. Discuss the implications of overhead costs on product pricing.