Group Problem 1 Accounting for overhead Francisco's Frames makes two types of frames, one Simple and one Complex. The simple product is a traditional photo frame, but the Complex product is a digital photo frame and requires computer coding. Traditionally, the company has always allocated OH costs to products based on machine hours. Last year the company implemented an activity-based costing system and managers determined the following activity pools and rates based on expected total overhead of $1,599,000. Pre-Determined Overhead Rate $1.25 per direct labor hour Assembly Fabrication $9.75 per machine hour Setups Coding $18.00 per batch $170,000 direct to the Complex product Only the Complex product requires coding, so all coding overhead should be allocated to this product. The firm pays it works at a direct labor rate of $15.50 per hour. The firm actually used exactly the same number of machine the expected to use. The following data relates to the actual production of both products: Simple Complex Units Produced 125,000 40,000 Direct labor hours 250,000 160,000 Machine hours 50,000 32,000 Batches 2,500 4,000 Direct Materials Cost $325,000 $475,000 Required: 1. What is the cost of producing one unit of the Simple product using traditional costing?