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Sunshine is an electronics components manufacturer. Information about the companys two products follows: AM-2 FM-9 Units produced 25,000 4,000 Direct labor hours required for production

Sunshine is an electronics components manufacturer. Information about the companys two products follows:

AM-2

FM-9

Units produced

25,000 4,000

Direct labor hours required for production

12,500 15,000

Units per batch

5,000 400

Shipping weight per unit

0.50 lbs. 10 lbs.

The company incurs $913,000 in overhead per year and has traditionally applied overhead on the basis of direct labor hours.

Assume that Sunshine has identified three activity cost pools.

Pool

Cost

Cost Driver

Assembly

$632,500 Direct labor hours

Setup

39,000 Number of setups (1 per batch)

Packaging

241,500 Weight

(i) Given these activity pools and cost drivers, how much overhead should be allocated to each product? (Round per unit rates to 2 decimal places, e.g. 3.54 and final answers to 0 decimal places, e.g. 45,286.)

AM-2

FM-9

Total allocated overhead

$enter a dollar amount rounded to 0 decimal places $enter a dollar amount rounded to 0 decimal places

(ii) What overhead cost per unit will be allocated to each product? (Round answers to 2 decimal places, e.g. 15.25.)

AM-2

FM-9

Overhead cost per unit

$enter a dollar amount rounded to 2 decimal places $enter a dollar amount rounded to 2 decimal places

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