Omega Industries provides you with the following cost report for Glowmax, its main product. Omega currently is producing 10,000 units of the product.

Required:
a. Compute the cost to produce 1,000 additional units of Glowmax.
b. Suppose that Omega has not implemented ABC. Rather, it allocates over-head costs to products at 150% of labor cost. As per this cost reporting system, calculate the cost to produce 1,000 additional units of Glowmax.
c. Which of the estimates is likely to be a superior estimate of the incremental cost of producing the additional 1,000 units?

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Cost ber Unit Remarks Materials and other variable costs Labor cost Unit level overhead Order processing and other batch level costs $250.00 $200.00 $150.00 $5.00 Based on 2 batches at the maximum size of 5,000 units each. Allocated equally across products. Cost for product divided by 10,000 to get cost per unit Total to product divided by 10,000 units Design and other product level costs $50.00 Facility level cost $6.50 Total cost per unit $661.50