Tilly Company manufactures two products, Product A and Product B. The company estimated it would incur $140,990 in manufacturing overhead and produce 500 units of Product A and 1400 units of Product B. Product A requires two hours of direct labor time, and Product B requires two hours. Product A costs $50 for materials and $21 for direct labor. Product B costs $30 for materials and $12 for direct labor.

Activity Cost Driver Cost

Machine Setups Number of Setups $20,800

Purchase Orders Number of Purchase Orders $83,000

Loading, Shipping, and Handling Number of Shipments $37,190

$140,990

Cost Driver Allocation Measures:

Cost Driver	Product A	Product B
Number of Setup	110	140
Number of Purchase Order	920	1310
Number of Shipments	295	1500

Compute the unit product cost of each product using the Activity Based Costing (ABC) method