Business, 19.01.2021 19:20 ashleyheink3796

Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system product A has been assigned overhead of $2.82 per unit while product B has been assigned $13.58 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Driver Driver Consumption
Machine setup $ 158,000 Setup hours 2,000
Materials handling 112,000 Pounds of materials 16,000
Electric power 25,000 Kilowatt-hours 25,000
The following cost information pertains to the production of A and B, just two of its many products:
A B
Number of units produced 5,000 10,000
Direct materials cost $32,000 $41,000
Direct labor cost $41,000 $38,000
Number of setup hours 100 200
Pounds of materials used 1,000 1,000
Kilowatt-hours 2,000 4,000
Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.)

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