Reference no: EM132229553

Edinburgh International manufactures two products, Squire and Laird. Estimates for the company’s products for next year are provided below: Squire Laird Estimated production volume 6 000 4 000 Direct material cost $50 / unit $80 / unit Direct labour per unit 3 hours @ $24 / hour 4 hours @ $24 / hour The company’s estimated overhead of $800 000 can be identified with three major activities: order processing ($150 000), machine processing ($560 000) and product inspection ($90 000). These activities are driven by number of orders processed, machine hours, and inspection hours respectively. Estimated activity levels for the next year are as follows: Squire Laird Total Orders processed 300 200 500 Machine hours 36 000 44 000 80 000 Inspection hours 4 000 16 000 20 000 Required: a) Assuming that Edinburgh International uses activity-based costing to apply overhead to production, calculate the overhead cost per unit for Squire and Laird if the estimated manufacturing volume is attained.