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	$250,000		$2,500,000
Direct labor hours	100,000		1,000,000
Machine hours	50,000		500,000
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	75,000		25,000
Business calculator	112,500		887,500
Total	187,500		912,500
Machine hours:
Scientific calculator	25,000		25,000
Business calculator	400,000		100,000
Total	425,000		125,000
Overhead costs:
Setup costs	$225,000		$225,000
Inspection costs	175,000		175,000
Power	250,000		150,000
Maintenance	200,000		250,000
Total	$850,000		$800,000

Required:

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

Plantwide rate	per direct labor hour
Overhead cost per unit:
Scientific	per unit
Business	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. Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round your intermediate calculations and answers to the nearest cent.

Departmental rates:
Department 1	per machine hour
Department 2	per direct labor hour
Overhead cost per unit:
Scientific	per unit
Business	per unit
Departmental rates:
Department 1	per direct labor hour
Department 2	per machine hour
Overhead cost per unit:
Scientific	per unit
Business	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	per unit
Business	per unit