Fanning Electronics produces video games in three marketcategories: commercial, home, and miniature. Fanning hastraditionally allocated overhead costs to the three products usingthe companywide allocation base of direct labor hours. The companyrecently implemented an ABC system when it installedcomputer-controlled assembly stations that rendered the traditionalcosting system ineffective. In implementing the ABC system, thecompany identified the following activity cost pools and costdrivers:
| Category | | Total Pooled Cost | Types of Costs | Cost Driver |
| Unit | | $ | 774,000 | | Indirect labor wages, supplies, factory utilities, machinemaintenance | Machine hours |
| Batch | | | 773,100 | | Materials handling, inventory storage, labor forsetups,packaging, labeling and shipping, scheduling | Number of production orders |
| Product | | | 211,700 | | Research and development | Time spent by research department |
| Facility | | | 520,000 | | Rent, general utilities, maintenance, facility depreciation,admin. salaries | Square footage |
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Additional data for each of the product linesfollow:
| Commercial | | Home | | Miniature | | Total |
| Direct materials cost | $ | 37.00 | /unit | | $ | 24.70 | /unit | | $ | 29.90 | /unit | | | — | |
| Direct labor cost | $ | 14.90 | /hour | | $ | 14.90 | /hour | | $ | 18.20 | /hour | | | — | |
| Number of labor hours | | 5,800 | | | | 12,500 | | | | 2,800 | | | | 21,100 | |
| Number of machine hours | | 13,000 | | | | 46,000 | | | | 31,000 | | | | 90,000 | |
| Number of production orders | | 250 | | | | 1,900 | | | | 1,050 | | | | 3,200 | |
| Research and development time | | 14 | % | | | 20 | % | | | 66 | % | | | 100 | % |
| Number of units | | 16,000 | | | | 45,000 | | | | 15,000 | | | | 76,000 | |
| Square footage | | 22,000 | | | | 51,000 | | | | 27,000 | | | | 100,000 | |
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Required
Determine the total cost and cost per unit for eachproduct line, assuming that overhead costs are allocated to eachproduct line using direct labor hours as a companywide allocationbase. Also determine the combined cost of all three productlines.
Determine the total cost and cost per unit for eachproduct line, assuming that an ABC system is used to allocateoverhead costs. Determine the combined cost of all three productlines.
(For all requirements, round intermediate calculations forallocation rates to 2 decimal places and all other calculations tothe nearest whole dollar. Round "Cost per Unit" to 2 decimalplaces. Round your answers for "Total Cost" to the nearest wholedollar amount.)
