Exercise 4-11 (Algo) Computing product cost per unit using plantwide method and activity-based costing LO P1, P3

Consider the following data for two products of Vigano Manufacturing.

Activity	Budgeted Cost	Activity Driver
Machine setup	$ 24,000	(20 machine setups)
Parts handling	19,200	(16,000 parts)
Quality inspections	28,800	(100 inspections)
Total budgeted overhead	$ 72,000

Unit Information	Product A		Product B
Units produced	2,400	units	480	units
Direct materials cost	$ 34	per unit	$ 44	per unit
Direct labor cost	$ 54	per unit	$ 64	per unit
Direct labor hours	2	per unit	2.50	per unit

1. Using a plantwide overhead rate based on 6,000 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each.

Actual Activity Usage	Product A		Product B
Setups	8	setups	12	setups
Parts	10,000	parts	6,000	parts
Inspections	40	inspections	60	inspections

Complete this question by entering your answers in the tabs below.

Using a plantwide overhead rate based on 6,000 direct labor hours, compute the total product cost per unit for each product.

Per Unit	Direct Materials	Direct Labor	Overhead	Product Cost per Unit
Product A
Product B