Reference no: EM132520816

Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers.

The two products use two overhead activities, with the following costs:

Setting up equipment           $3,000

Machining                         $15,000

• The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production.

                                                      Excellent Laptops                            Outstanding Computers

Direct Labor                                 $25,000                                        $10,000

Direct Materials                            $20,000                                         $5,000

Expected Production in Units                3,000                                        3,000

Machine Hours                                   850                                          2,000

Setup Hours                                          80                                            75

Question 1: Calculate the overhead cost per unit for each of Outstanding Computer's computer using overhead rates based on machine hours and setup hours. (Note: Round the overhead rates and the final answer to two decimal places.)

a.$3.99 per unit