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Gee Company produces two types of stereo units: deluxe and regular. Activity data follow: Product-Costing Data Activity Usage Measures Deluxe Regular Total Units produced per year 5,000 50,000 55,000 Prime costs $39,000 $369,000 $408,000 Direct labor hours 5,000 45,000 50,000 Machine hours 10,000 90,000 100,000 Production runs 10 5 15 Number of moves 120 60 180 1. Consumption ratios: Overhead Activity Deluxe Regular Activity Driver Setups Materials handling 0.67 0.67 0.33 0.33 Production runs Number of moves Power Testing 0.10 0.10 0.90 0.90 Machine hours Direct labor hours 2. Batch-level: Setups and Materials handling Unit-level: Power and Testing 3. Batch-Level Pool Setups $60,000 Materials handling 30,000 Total $90,000 Runs . 15 Pool rate $ 6,000 per run Unit-Level Pool Power $ 50,000 Testing 40,000 Total $ 90,000 Machine hours 100,000 Pool rate 0.90 per machine hour 4. Deluxe $ 39,000 Regular $369,000 60,000 30,000 Prime costs Overhead costs: Batch-level pool: ($6,000 x 10) ($6,000 x 5) Unit-level pool: ($0.90 x 10,000) ($0.90 x 90,000) Total manufacturing costs Units produced Unit cost (Total costs/Units) 9,000 81,000 $480,000 50,000 $ 9.60 $108,000 5,000 $ 21.60 . Activity Cost Data (Overhead Activities) Activity Cost Setups $ 60,000 Materials handling 30,000 Power 50,000 Testing 40,000 Total $180,000 1. Calculate the consumption ratios for each activit 2. Group activities based on the consumption ratios 3. Calculate a rate for each pooled group of activities 4. Using the pool rates, calculate unit product costs

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