Sander Company produces mathematical and financial calculators and operates at capacity. Data related to the two products are presented here:

Total manufacturing overhead costs are as follows:
                                                        Total
Machining costs .......................$360,000
Setup costs ................................ 108,000
Inspection costs ....................... 117,000
1. Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product.
2. Compute the manufacturing cost per unit for each product.
3. How might Sander's managers use the new cost information from its activity-based costing system to better manage its business?

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Mathematical Annual production in units Direct material costs Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours Number of production runs Inspection hours 45,000 S180,000 $ 90,000 4,500 30,000 45 1,200 Financial 90,000 S360,000 S180,000 9,000 60,000 45 600