Chapter 5 Homework 1 Saved Help Save & Exit Submit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question Fanning Electronics produces video games in three market categories: commercial, home, and miniature. Fanning has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers: points Category Unit Total Pooled Cost $813, 400 Cost Driver Machine hours Batch 446,300 Number of production orders Types of Costs Indirect labor wages, supplies, factory utilities, machine maintenance Materials handling, inventory storage, labor for setups, packaging, labeling and shipping, scheduling Research and development Rent, general utilities, maintenance, facility depreciation, admin. salaries Product Facility 210,500 421,200 Time spent by research department Square footage Additional data for each of the product lines follow: Total Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage Commercial $ 35.50/unit $ 13.90/hour 5,800 18,000 230 14% 17,000 19,000 Home $ 23.40/unit $ 13.90/hour 11,300 43,000 2,000 24% 47,000 46,000 Miniature $29.90/unit $ 17.20/hour 2,200 22,000 570 62% 16,000 16,000 19,300 83,000 2,800 100% 80,000 81,000 Required a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines