Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows:

Activity Pools	Cost Pool Total			Cost Driver
Repair and maintenance on assembly machine	$	145,000		Number of units produced
Programming cost		159,500		Number of programming hours
Software inspections		28,000		Number of inspections
Product testing		32,000		Number of tests
Total overhead cost	$	364,500

Expected activity for each product follows:

	Number of Units			Number of Programming Hours			Number of Inspections			Number of Tests
Decoder P		17,400			2,500			380			2,240
Decoder Q		40,600			2,500			120			1,760
Total		58,000			5,000			500			4,000

Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow:

	Direct Labor Hours
Decoder P		8,100
Decoder Q		18,900
Total		27,000

Required

1. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base.

   	Allocated Cost
   Decoder P
   Decoder Q
   Total

2. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC

3. Cost per unit
   Method	Decoder P	Decoder Q
   ABC
   Labor hours