Amber Company produces electronic fish finders. It makes two different fish finders: the standard model, which is produced in bulk and sells for $200, and the deluxe model, which comes in various configurations and sells for $400. Amber’s engineering and design overhead cost for 2012 is $70,000. The following information relates to production in 2012:

Number of different machine setups needed for a standard model production run . . . . . . . 4

Number of different machine setups needed for a deluxe model production run . . . . . . . . . 10

Number of standard fish finders produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000

Number of deluxe fish finders produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000

Number of engineering design changes needed on the standard model . . . . . . . . . . . . . . . . . . 7

Number of engineering design changes needed on the deluxe model . . . . . . . . . . . . . . . . . . . . 3

Average batch size per production run for standard model . . . . . . . . . . . . . . . . . . . . . . . . . . . 450

Average batch size per production run for deluxe model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250

Required:

1. Determine the engineering and design costs to be assigned to standard and deluxe fish finders using the following allocation methods:

a. Number of units produced

b. Number of setups required

c. Number of engineering design changes needed

2. Which allocation method do you believe is most equitable?