Problem 17-3B Using activity-based costing to allocate overhead cost. and compute overhead cost per unit and gross prot per unit P3 Refer to the information in Problem 17-23. Additional information on overhead cost follows. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Mixing 3160.000 Direct labor hours (DLH) 40,000 Electricity 22.000 Machine hours {Ml-l] 10,000 Inspection 98,000 Inspections 490 Total 3280.000 Required 1. Compute an activity rate for each activity using activity-based costing. 2. The following actual activity usage produced 12,000 units of Extra Fine and 8,000 units of Family Style. Allocate overhead cost to Extra Fine and to Family Style and compute overhead cost per unit for each product using activity- based costing. Aclivity Usage Activity Cost Driver Extra Fine Family Style Direct labor hours [DLH] 28,000 12,000 Machine hours {Ml-l} 6.000 4,000 Inspections 274 216 3. Compute product cost per unit for Extra Fine and for Family Style. 4. For each product, compute the gross prot per unit (selling price per unit minus the product cost per unit). Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000 of overhead cost and 40,000 direct labor hours. Additional information follows. Per Unit (case) Selling Price Direct Materials Direct Labor Extra Fine $64 $18 $30 Family Style 53 16 25