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Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $10.80 per unit, while product B has been assigned $3.60 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Machine setup Materials handling Electric power Activity Costs Cost Drivers $360,000 Setup hours 100,000 Pounds of materials 40,000 Kilowatt-hours Activity Driver Consumption 4,000 20,000 40,000 The following cost information pertains to the production of A and B, just two of Hakara's many products: Number of units produced Direct materials cost Direct labor cost Number of setup hours Pounds of materials used Kilowatt-hours B 4,000 20,000 $42,000 $54,000 $24,000 $40,000 400 200 1,000 3,000 2,000 4,000 Required: 1. Use activity-based costing to determine a unit cost for each product. (Round your answers to 2 decimal places.) Required: 1. Use activity-based costing to determine a unit cost for each product. (Round your answers to 2 decimal places.) & Answer is not complete. Cost per Unit Product A Product B
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