XYI manufactures two products: A and B. A review of the company's accounting record revealed the following per-unit information: Production volume (units) A: 2,500 B: 5,000

Direct material A: $40 B: $60

Direct labor: A: 2 hours B: 3 hours Direct labor costs budgeted for the period are $ 240,000. The total amount of direct labor hours available is 24,000.

Manufacturing overhead per units is currently computed by spreading overhead of $1,860.000 for direct labor hours. The variable portion of manufacturing overhead is $300,000. Management is considering a shift to activity-based costing in an effort to improve the accounting procedures, and the following data are available: Cost Poo

Cost pool	Cost	Cost Driver	A	B
Setups	$240,000	Number of setups	100	200
General factory	1,500,000	Direct labor hours	5,000	15,000
Machine processing	120,000	Machine hours	2,200	8,000
	1,860,000

XYZ determines selling prices by adding 40% to a product's total cost. Required:

I. Compute the per-unit cost and selling price of product B by using XYZ's current procedures.

2 Compute the per-unit overhead cost of product B if the company switches to activity based costing.

3. Compute the total per-unit cost and selling price under activity-based costing.