Using the ABC (activity based costing) system, for each style:

1. compute the estimated overhead costs per unit

2. Compute the estimated operating profit per unit

Problem: Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. Production takes 25, 25, and 10 machine hours to manufacture 1000-unit batches of brass, chrome and white faucets, respectively. The following additional data apply: BRASS 30,000 Projected sales in units CHROME 50,000 WHITE 40,000 PER UNIT data: Selling price $40 $20 $30 $ 8 $15 $ 4 $ 3 $ 8 $9 Direct materials Direct labor Overhead cost based on direct labor hours (traditional system) $12 $ 3 $ 9 Hours per 1000-unit batch: Direct labor hours Machine hours Setup hours Inspection hours 40 25 1.0 30 10 25 0.5 20 30 10 1.0 20 Total overhead costs and activity levels for the year are estimated as follows: Overhead costs Activity Direct labor hours Machine hours Setups Inspections Activity levels 2,900 hours 2,400 hours 95 setup hours 2,700 inspection hours $465,500 $405,000 $870,500