Schmidt Electronics produces two products: CD105 and HD210. Relevant costing information for each product is as follows:

Manufacturing overhead costs and associated ABC allocation bases are as follows:

Required:
1. If manufacturing overhead is allocated on the basis of direct labor hours, compute the cost per unit for CD105 and HD210.
2. Determine the allocation rate per activity for each ABC allocation basis.
3. Determine the manufacturing overhead cost for each product using your answer to part (2).
4. Using your answer to part (3), compute the cost per unit for CD105 and HD210.
5. Compare your answers to parts (1) and (4). Why is there a difference incosts?

Transcribed Image Text:

HD210 Per Unit Direct materials Direct labor. Direct labor hours per unit Total number of machine setups Units produced CD105 $10.50 $17.25 $15.00 2. 200 7,000 $10.00 400 6,000