products follow:

Direct

Labor-Hours per Unit Annual

Production

x Product A 0.70 29,000 units

x Product B 0.30 48,000 units

Additional information about the company follows:

a. Product A require $35 in direct materials per unit, and Product B require $15 per unit.

b. The direct labor wage rate is $10 per hour.

c. Product A require special equipment and are more complex to manufacture than Product B.

d. The ABC (activity-based costing) system has the following activity cost pools:

Activity Cost Pool (Activity Measure) Estimated Overhead Cost Activity

Product A Product B Total

Machine setups (number of setups) $15,300 90 80 170

Special processing (machine-hours) $128,000 3,200 0 3,200

General factory (organization-sustaining) $103,100 NA NA NA

Required:

1. Compute the activity rate for each of the following activity cost pools.

Activity Cost Pool	(a) Estimated Overhead Cost	(b) Expected Activity		(c) Activity Rate
Machine setups			setups		per setup
Special processing			MHs		per MH

2. Determine the unit product cost of Product A according to the ABC system. (Complete the worksheets below. Round final answers to 2 decimal places.)

Overhead (ABC) cost is assigned to Product A as follows:

Activity Cost Pool	(a) Activity Rate		(b) Activity		(c) ABC Cost
Machine setups		per setup		setups
Special processing		per MH		MHs
Total

Unit product cost of Product A according to the ABC system:

Product A ($)

Direct materials (per unit):

Direct labor (per unit):

Overhead (per unit):

Unit (product) cost: