Reference no: EM132509776

The Hollywood Company manufactures two types of Los Angeles souvenirs - The Alex and The Jennifer. Product costs consist of Direct Materials, Direct Labor and Overhead. Overhead is allocated using direct labor hours. The number of direct labor hours for the year was 5,000. Total direct labor cost is $100,000. The number of machine hours was 8,000 at a rate of $12 per hour. All machines were accounted for in a single cost pool.

Direct materials to make both Alex and Jennifer souvenirs were 80% of unit direct labor costs for each product. The company manufactured 50,000 units of The Alex and 80,000 units of The Jennifer a year. Alex souvenirs use 40% of total direct labor hours and 70% of total machine hours while Jennifer souvenirs use 60% of total Direct Labor hours 60% of total and 30% of total machine hours.

Manufacturing Overhead for Hollywood Company:

Receiving and material handling              $30,000

Machine maintenance                     $10,000

Machine depreciation                      $25,000

Quality inspection                          $15,000

Required:

Question 1: What are the unit costs for The Alex and The Jennifer under Hollywood's current product costing system?