Question
Poo Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units High F
Poo Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders.
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, applied engineering and design factory overhead for the High F model per unit is (rounded to the nearest cent):
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