Reference no: EM132667020

Akara 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 $31.58 per unit, while product B has been assigned $8.69 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            Activity Driver Consumption

Machine setup.        $198,000                   Setup hours              2,000
Materials handling    168,000                 Pounds of materials          21,000
Electric power.        40,000                Kilowatt-hours                  40,000

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       4,000            20,000
Direct materials cost              $31,000          $33,000
Direct labor cost                   $33,000             $33,000
Number of setup hours             200                    200
Pounds of materials used            1,000             2,000
Kilowatt-hours                     4,000                   4,000

Required:

Problem 1. Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.)