As you learned in the previous chapters, Current Designs has two main product linescomposite kayaks, which are handmade and very labor-intensive, and rotomolded kayaks, which require less labor but employ more expensive equipment. Current Designs controller, Diane Buswell, is now evaluating several different methods of assigning overhead to these products. It is important to ensure that costs are appropriately assigned to the companys products. At the same time, the system that is used must not be so complex that its costs are greater than its benefits. Diane has decided to use the following activities and costs to evaluate the methods of assigning overhead.

Activities		Cost
Designing new models		$132,000
Creating and testing prototypes		152,000
Creating molds for kayaks		208,000
Operating oven for the rotomolded kayaks		36,000
Operating the vacuum line for the composite kayaks		26,000
Supervising production employees		192,000
Curing time (the time that is needed for the chemical processes to finish before the next step in the production process; many of these costs are related to the space required in the building)		176,000
Total		$922,000

As Diane examines the data, she decides that the cost of operating the oven for the rotomolded kayaks and the cost of operating the vacuum line for the composite kayaks can be directly assigned to each of these product lines and do not need to be assigned with the other costs. For purposes of this analysis, assume that Current Designs uses $255,000 in direct labor costs to produce 1,000 composite kayaks and $282,500 in direct labor costs to produce 4,000 rotomolded kayaks each year.

Another method of assigning overhead is to use direct labor dollars as an assignment basis. Remembering that the costs of the oven and the vacuum line have been assigned directly to the product lines, allocate the remaining costs using direct labor dollars as the allocation basis. Then, determine the amount of overhead that should be assigned to each unit of each product line using this method. (Round cost assigned per unit to 2 decimal places, e.g. 125.25.)

		Composite		Rotomolded
Total cost assigned		$		$
Cost assigned per unit		$		$