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Stuart Electronics produces video games in three market categories: commercial, home, and miniature. Stuart has traditionally allocated overhead costs to the three products using the
Stuart Electronics produces video games in three market categories: commercial, home, and miniature. Stuart has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers: Category Unit Total Pooled Cost $ 827,700 Cost Driver Machine hours Batch 701,800 Types of costs Indirect labor wages, supplies, factory utilities, machine maintenance Materials handling, inventory storage, labor for setups, packaging, labeling and shipping, scheduling Research and development Rent, general utilities, maintenance, facility depreciation, admin. salaries Product 210,600 Number of production orders Time spent by research department Square footage Facility 506,300 Additional data for each of the product lines follow: Total Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage Commercial $36.90/unit $ 14.40/hour 6,300 10,000 280 12% 14,000 23,000 Home $ 23.80/unit $ 14.40/hour 11,900 41,000 2,200 23% 48,000 45,000 Miniature $ 30.90/unit $ 17.40/hour 2,600 38,000 520 65% 20,800 89,000 3,000 100% 13,000 15,000 75,000 83,000 Required a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines. (For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole dollar amount.) Total Cost Cost per Unit Type of Product Commercial Home Miniature ...Combined total
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