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	75,000	750,000
Prime costs	$234,000	$2,340,000
Direct labor hours	100,600	1,006,000
Machine hours	46,400	464,000
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	74,500	26,100
Business calculator	130,780	875,220
Total	205,280	901,320
Machine hours:
Scientific calculator	24,000	22,400
Business calculator	398,400	65,600
Total	422,400	88,000
Overhead costs:
Setup costs	$236,500	$236,500
Inspection costs	175,000	175,000
Power	233,000	165,000
Maintenance	190,000	237,500
Total	$834,500	$814,000

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
Overhead cost per unit:
Scientific
Business

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
Department 2
Overhead cost per unit:
Scientific
Business

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
Department 2
Overhead cost per unit:
Scientific
Business

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
Business