Business, 01.03.2021 21:30 oomale

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 $22.86 per unit, while product B has been assigned $7.39 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 Drivers Driver Consumption
Machine setup $516,000 Setup hours 6,000
Materials handling 105,000 Pounds of materials 21,000
Electric power 26,000 Kilowatt-hours 26,000

The following cost information pertains to the production of A and B, just two of Hakara's many products:

A B
Number of units produced 5,000 20,000
Direct materials cost $31,000 $29,000
Direct labor cost $30,000 $40,000
Number of setup hours 200 100
Pounds of materials used 1,000 2,000
Kilowatt-hours 4,000 2,000

Required:
Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.)

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