Product-Costing Accuracy, Plantwide and Departmental Rates, ABC

Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the most popular. The following data have been gathered for these two products:

	Product-Related Data
	Scientific	Business
Units produced per year	77,000	770,000
Prime costs	$250,000	$2,500,000
Direct labor hours	98,100	981,000
Machine hours	48,800	488,000
Production runs	100	150
Inspection hours	2,000	3,000
Maintenance hours	2,250	9,000

	Department Data
	Department 1	Department 2
Direct labor hours:
Scientific calculator	75,700	22,400
Business calculator	107,910	873,090
Total	183,610	895,490
Machine hours:
Scientific calculator	25,600	23,200
Business calculator	419,840	68,160
Total	445,440	91,360
Overhead costs:
Setup costs	$215,500	$215,500
Inspection costs	185,000	185,000
Power	236,000	132,000
Maintenance	198,000	229,500
Total	$834,500	$762,000

Required:

1. Compute the overhead cost per unit for each product using a plantwide, unit-based rate using direct labor hours. Round your calculations and answers to the nearest cent.

Plantwide rate	$fill in the blank 1 per direct labor hour
Overhead cost per unit:
Scientific	$fill in the blank 2 per unit
Business	$fill in the blank 3 per unit

2. Compute the overhead cost per unit for each product using departmental rates. In calculating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required.

Departmental rates:
Department 1	$fill in the blank 4 per machine hour
Department 2	$fill in the blank 5 per direct labor hour
Overhead cost per unit:
Scientific	$fill in the blank 6 per unit
Business	$fill in the blank 7 per unit

Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required.

Departmental rates:
Department 1	$fill in the blank 8 per direct labor hour
Department 2	$fill in the blank 9 per machine hour
Overhead cost per unit:
Scientific	$fill in the blank 10 per unit
Business	$fill in the blank 11 per unit

3. Compute the overhead cost per unit for each product using activity-based costing. Round your calculations and answers to the nearest cent.

	Overhead Cost
Scientific	$fill in the blank 12 per unit
Business	$fill in the blank 13 per unit