The Hill Mfg Firm came up with the following activity-based OH rates for general overhead.

1. Using the overhead or activity rates below (already calculated for you), apply the activity costs to the Y-30 product. (Ive already correctly calculated the Activity-Based OH for the X-20 product.)

Machine setups - $130 per setup

Soldering - $2.25 per joint

Quality control - $40 per inspection

Shipments - $220 per shipment

Purchase orders - $75 per order

Machine related - $8 per machine hour

	Product X-20			Product Y-30
	Expected Activity	Amount of OH		Expected Activity	Amount of OH
Machine setups	1,000 setups	$130,000		600 setups	$78,000
Quality control	4,000 inspect	160,000		5,000 inspections	200,000
Purchase orders	840 orders	63,000		360 orders	27,000
Soldering	60,000 joints	135,000		140,000 joints	315,000
Shipments	400 shipments	88,000		200 shipments	44,000
Machine related	30,000 mach hrs	240,000		40,000 mach hrs.	320,000
Total overhead costs		$816,000			$984,000

2. Hill Mfg Firm expects to produce and sell 30,000 X-20 products and 5,000 Y-30 products. What total Overhead per unit should be charged to each of these 2 products?

3. The firm believes that it cannot raise prices on either of these 2 products in the short-term, but will investigate whether specific cost initiatives should be undertaken.

1. Calculate the per unit cost per activity
2. Next, identify 2 activity costs (from above) that you would suggest that Hill Mfg investigate first.
3. Why did you pick these 2 costs? Discuss the reasoning behind your choices do not simply say the cost was high. Think about what is causing the high cost.