Answer:
Results are below.
Explanation:
<u>First, we need to calculate the activities rates of allocation:</u>
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Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setup= 360,000/4,000= $90 per set up hour
Materials handling= 100,000/20,000= $5 per pound of material
Electric power= 40,000/40,000= $1 per kilowwat hour
<u>Now, we can allocate costs to each product:</u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
A:
Allocated MOH= 90*400 + 5*1,000 + 1*2,000
Allocated MOH= $43,000
B:
Allocated MOH= 90*200 + 5*3,000 + 1*4,000
Allocated MOH= $37,000
<u>Finally, the total and unitary cost:</u>
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A:
Total cost= 42,000 + 24,000 + 43,000
Total cost= $109,000
Unitary cost= 109,000/4,000
Unitary cost= $2.73
B:
Total cost= 54,000 + 40,000 + 37,000
Total cost= $131,000
Unitary cost= 131,000/20,000
Unitary cost= $6.55