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Figure 7-4. Honeydew Company produces two products, a high end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs: Setting up equipment $ 2,000 Machining 12,000 The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. Bunsen Beaker Direct Labor $20,000 $5,000 Direct Materials 15,000 4,000 Expected Production in Units 2,000 2,000 Machine hours 750 1,500 Setup hours 50 50

1. Refer to Figure 7-4. Calculate Beaker's consumption ratio for setup hours. a. 0.50 b. 0.45 c. 0.90 d. 0.25 e. 0.75

2. Refer to Figure 7-4. Calculate the overhead cost per unit for Bunsen Laptops, using a plantwide rate based on direct labor costs. a. $9.63 per laptop b. $22.45 per laptop c. $5.60 per laptop d. $7.22 per laptop e. $7.50 per laptop

3. Refer to Figure 7-4. Calculate the overhead cost per unit for each Beaker Computer, using overhead rates based on machine hours and setup hours. a. $6.10 per unit b. $4.50 per unit c. $5.75 per unit d. $3.88 per unit

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