Walton Electronics produces video games in three market categories: commercial, home, and miniature. Walton has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers: Category Total Pooled Cost Types of costs CO Unit $686,200 Indirect labor wages, supplies, factory utilities, Machine hours machine maintenance Batch 729, 100 Materials handling, inventory storage, labor for Number of proc setups, packaging, labeling and shipping, scheduling Product 211,100 Research and development Time spent by Facility 453,600 Rent, general utilities, maintenance, facility Square footage depreciation, admin. salaries Additional data for each of the product lines follow: Total Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage Commercial $ 36.30/unit $ 15.10/hour 6,600 10,000 260 11% 12,000 19,000 Home $ 24.70/unit $ 15.10/hour 11,400 42,000 1,900 19% 40,000 49,000 Miniature $ 29.80/unit $ 19.00/hour 2,800 21,000 640 70% 11,000 16,000 20,800 73,000 2,800 100% 63,000 84,000 uces video games in three market categories: commercial, home, and miniature. Walton has erhead costs to the three products using the companywide allocation base of direct labor rently implemented an ABC system when it installed computer-controlled assembly stations onal costing system ineffective. In implementing the ABC system, the company identified st pools and cost drivers: poled Cost Types of costs Cost Driver 5,200 Indirect labor wages, supplies, factory utilities, Machine hours machine maintenance 9,100 Materials handling, inventory storage, labor for Number of production orders setups, packaging, labeling and shipping, scheduling 1,100 Research and development Time spent by research department 3,600 Rent, general utilities, maintenance, facility Square footage depreciation, admin. salaries of the product lines follow: Total st rs burs 7 orders oment time Commercial $ 36.30/unit $ 15.10/hour 6,600 10,000 260 11% 12,000 19,000 Home $ 24.70/unit $ 15.10/hour 11,400 42,000 1,900 19% 40,000 49,000 Miniature $ 29.80/unit $ 19.00/hour 2,800 21,000 640 70% 11,000 16,000 20,800 73,000 2,800 100% 63,000 84,000 Required a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines. (For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole dollar amount.) Total Cost Cost per Unit Type of Product a. Commercial Home Miniature Combined total b. Commercial Home Miniature Combined total $ $ 0
