Product-Costing Accuracy, Plantwide and Departmental Rates, ABC

Swing 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	74,000	740,000
Prime costs	$245,000	$2,450,000
Direct labor hours	100,200	1,002,000
Machine hours	46,600	466,000
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	77,400	22,800
Business calculator	100,200	901,800
Total	177,600	924,600
Machine hours:
Scientific calculator	24,400	22,200
Business calculator	405,040	60,960
Total	429,440	83,160
Overhead costs:
Setup costs	$217,000	$217,000
Inspection costs	165,000	165,000
Power	251,000	159,000
Maintenance	210,000	217,500
Total	$843,000	$758,500

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	$ 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. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required.

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