Tent Master produces Pup tents and Pop$-$up tents. The company budgets $$318,000$ of overhead cost and $53,000$ direct labor hours. Additional information follows.

Per Unit Selling Price Direct Materials Direct Labor

Pup tent $ $88$ $ $24$ $ $49$

Pop$-$up tent $832731$

Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage

Assembly $ $212,000$ Direct labor hours $($DLH$)53,000$

Electricity $35,000$ Machine hours $($MH$)10,000$

Materials purchasing $71,000$ Purchase orders $($PO$)500$

Total $ $318,000$

Required:

Compute an activity rate for each activity using activity$-$based costing.

The following actual activity usage produced $10,000$ Pup tents and $6,000$ Pop$-$up tents. Allocate overhead cost to Pup tents and to Pop$-$up tents and compute overhead cost per unit for each product.

Activity Cost Driver Activity Usage

Pup tents Pop$-$up tents

Direct labor hours$($DLH$)35,50017,500$

Machine hours $($MH$)4,0006,000$

Purchase orders$($PO$)150350$

Compute product cost per unit for Pup tents and for Pop$-$up tents.

For each product, compute the gross profit per unit $($selling price per unit minus the product cost per unit$).$