XL-D XL-C

Units produced 100,000 25,000

Direct material costs per unit $12 $14

Direct Labor Information

Direct labor-hours per unitProduction 0.1 0.1

Direct labor-hours per unitAssembly 0.4 0.4

Direct labor rate per hourall labor $20 $20

Other Activity Information

Machine-hours per unitProduction 1.6 1.6

Machine-hours per unitAssembly 0.4 0.4

Testing hours per unit 3.0 3.0

Shipping weight per unit (pounds) 1.0 1.6

Wastewater generated per unit (gallons) 10.0 0.0

Annual overhead costs for the two departments follow:

Production Department Assembly Department

$1,050,000 $500,000

B. The controller recently completed an executive education course describing the two-stage allocation procedure. Assume that the first stage allocates costs to departments and the second stage allocates costs to products. The controller believes that the costs will be more accurate if machine-hours are used to allocate Production Department costs and direct labor-hours are used to allocate Assembly Department costs. What per unit product costs will be reported for the two products if the two-stage allocation process is used?