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Robert Corporation is currently using a single pre-determined overhead rate based on direct labor hours to allocate manufacturing overhead to its two products: A and
Robert Corporation is currently using a single pre-determined overhead rate based on direct labor hours to allocate manufacturing overhead to its two products: A and B. The company is considering the use of activity-based costing (ABC). The following information is provided about the production of two product lines: Activity Cost Allocation Base Setup $105,000 Setups Machine Maintenance 60,000 Machine hours Total manufacturing overhead $165,000 costs Product A Quantity per Product Line Product B Direct labor hours 5,000 7,000 Setups 20 180 Machine hours 960 3,040 Robert plans to produce 200 units of Product A and 300 units of Product B. Manufacturing overhead cost per unit of Product A, using the single plant-wide rate is closest to: $343.75 per unit $124.50 per unit $550,00 per unit $26.56 per unit $825.00 per unit
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