eBookPrint Item Question Content Area Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 60,000 units of Strands, which has a per-unit direct material cost of $8 and a per-unit direct labor cost of $60. It also expects to manufacture 40,000 units of Shapes, which has a per-unit material cost of $12 and a per-unit direct labor cost of $40. It is estimated that Strands will use 120,000 machine hours and Shapes will require 80,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $30.84 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown:

Machine Setups $90,000

Machine Processing 6,000,000

Material Requisitions 78,750

Total Overhead $6,168,750

The cost driver for each cost pool and its expected activity is shown:

Strands Shapes Total

Machine Setups 100 200 300

Machine Hours 120,000 80,000 200,000

Parts Requisitions 70 105 175

A. What is the per-unit cost for each product under the traditional allocation method? Round your answers to two decimal places.

Strands and Shapes

B. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places. Strands and Shapes

C. Compared to ABC costing, was each product's overhead under- or overapplied?

D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places. Strands and shapes