Awesome company makes two products: E and F. Data for two products for year:

Current Selling price per unit E($275) F($200)

Current materials cost per unit E($10) F($9)

Current labor cost per unit E($12) F($10)

Current labor hours per unit E(8.5) F($4.5)

Number of units produced E(2500) F(1500)

The companys manufacturing overhead costs for the year are $300,000. Management is considerings an activity based costing sytem in which 35% of the overhead would continue to be allocated on the basis of direct labor hours and 65% would be allocated on the basis of machiine hours.

The time is expected to be distributed as follows for upcoming year:

Machine related E(2,000) F(1,000)

1) Compute the overhead cost per unit using the proposed ABC system:

Product E 

Product F 

2) Compute the unit product cost per unit using the proposed ABC system:

Product E 

Product F 

Answer rating: 100% (QA)

Computing the overhead cost per unit using the proposed ABC system First we need to calculate the to... View the full answer