Question
Two of Tamarisk's products currently sell for $8 per unit, reflecting a 50% markup on their product cost. The overhead component of the product cost
Two of Tamarisk's products currently sell for $8 per unit, reflecting a 50% markup on their product cost. The overhead component of the product cost was believed to be $2 per unit for both products. After further analysis of the overhead costs, however, the following activity pools and cost driver quantities were determined.
Activity Total cost Budgeted Quantity of Cost driver
Machining $150,0000 100,000 machine hours
Assembly 180,000 72,000 direct labor hours
Setup 88,000 8,000 setup hours
Product A Product B
Unit produced 15,000 10,000
Machine hours used 4,500 4,100
DL hours used 2,100 3,100
Setup hours 600 1,000
(b) Translate total MOH into a per unit MOH cost for each product under this ABC system. How do these amounts compare to the currently understood MOH cost per unit? (Round answer to 2 decimal places, e.g. 15.25)
Product A Product B
MOH per unit $ $
Please help me to get the right answer. Thank you in advance.
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