ONLY PART B

Rundle Electronics produces video games in three market categories: commercial, home, and miniature. Rundle has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers: Category Unit Total Pooled Cost $ 655,200 Cost Driver Machine hours Batchi 395, 789 Number of production orders Types of Costs Indirect labor wages, supplies, factory utilities, machine maintenance Materials handling, inventory storage, labor for setups, packaging, labeling and shipping, scheduling Research and development Rent, general utilities, maintenance, facility depreciation, admin. salaries Product Facility 211,200 513, eve Time spent by research department Square footage Additional data for each of the product lines follow: Total Commercial $ 36.90/unit $ 13.70/hour 5,100 16,000 260 12% 13,000 15,000 Home $ 23.40/unit $ 13.70/hour 11,100 49,000 Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage Miniature $ 30.50/unit $ 18.60/hour 2,100 7,000 340 72% 12,eee 30,000 2,100 16% 43,000 50,000 18,300 72,000 2,700 100% 68,000 95,000 Required a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines