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	73,000	730,000
Prime costs	$252,000	$2,520,000
Direct labor hours	100,700	1,007,000
Machine hours	50,400	504,000
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	75,900	24,800
Business calculator	120,840	886,160
Total	196,740	910,960
Machine hours:
Scientific calculator	26,500	23,900
Business calculator	418,700	85,300
Total	445,200	109,200
Overhead costs:
Setup costs	$233,500	$233,500
Inspection costs	160,000	160,000
Power	245,000	162,000
Maintenance	199,000	273,500
Total	$837,500	$829,000

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