Black Oak Company identified the following activities, estimated costs for each activity, and identified cost drivers for each activity for this coming year. (These are the first three steps of activity-based costing.)

The company produces three products, Z1, Z2, and Z3. Information about these products for the month of May follows:

Actual cost driver activity levels for the month of May are as follows:

Required:

a. Using the estimates for the year, compute the predetermined overhead rate for each activity (this is step 4 of the activity-based costing process).

b. Using the activity rates calculated in requirement a and the actual cost driver activity levels shown for May, allocate overhead to the three products for the month of May (this is step 5 of the activity-based costing process).

c. For each product, calculate the overhead cost per unit for the month of May. Round results to the nearest cent.

d. For each product, calculate the product cost per unit for the month of May. Round results to the nearest cent.

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Estimated Annual Overhead Costs Estimated Annual Cost Driver Activity Activity Ordering parts Cost Driver Number of purchase requisitions Number of parts purchased Machine hours Inspections hours $ 400,000 560,000 350,000 200,000 5,000 purchase requisitions 80,000 parts purchased 7,000 machine hours 1,000 inspection hours Tracking inventory of parts Running machines Inspecting finished products Total $1,510,000 Z1 22 Z3 Direct materials cost per unit Direct labor cost per unit Overhead cost per unit Product cost per unit Units produced $ 75 25 $ 100 35 $200 70 %$4 250 units 500 units 700 units