XYZ Manufacturing, Inc. produces three products (Ace, Best, and Champ) in two cost centers, Machining and Assembly. Each product requires one hour of direct labor for completion. The following table provides production and cost data for the past year.

1. The company wishes to consider using traditional cost center indirect cost allocation. It determines that the Machining Cost Center can use machine hours as the allocation basis for overhead assignment while the Assembly Cost Center can use direct labor costs instead.
   1. Determine the indirect cost rate for each cost center, and the unit cost including direct and indirect charges for each product.
   2. If the Machining Cost Center had 1200 machine hours in September '19, what would be its indirect cost charge for the month?

Number of units Machine hours Ace 25,000 2,500 Best 15,000 1,500 Champ 5,000 2,000 Total 45,000 6,000 $1,000,000 375,000 $450,000 225,000 $275,000 75,000 $1,725,000 675,000 Direct materials Direct labor Overhead Machining Assembly Total overhead Tot costs 900,000 450.000 1,350,000 $3,750,000