Question: Applying overhead using activity based costing for the following 2 models of boats Cost Driver Annual Cost Total Activity Production order set-up $147,600 4,800 set-ups

Applying overhead using activity based costing for the following 2 models of boats

Cost Driver Annual Cost Total Activity

Production order set-up $147,600 4,800 set-ups

Raw Material ordering $216,800 8,000 items ordered

Product cleaning $1,680,200 775 inspection approvals

Equipment usage $948,500 12,500 machine hours

Cost Driver Activity Required Activity Required

Viking-star (117 units) Lion-star (86 units)

Production order set-up 1,084 set-ups 976 set-ups

Raw Material ordering 2,050 items ordered 3,690 items ordered

Product cleaning 201 inspec. app 41 inspec. app

Equipment usage 1,025 machine hrs. 1,575 machine hrs.

How much overhead should be applied to each product? What is the overhead per unit?

The following per unit data is also available

Viking-star; price $39,999, Direct labor $13,021, Direct material $17,385

Lion-star; price $31,999, Direct labor $9,623, Direct Material $13,792

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