Sandstorm Manufacturing Inc. makes two types of industrial component parts%u2014the LE100 and the UL600. It annually produces 120,000 units of LE100 and 25,000 units of UL600. The company%u2019s conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company%u2019s two product lines is shown below:
| LE100 | UL600 | Total | ||||
| Direct materials | $ | 720,000 | $ | 357,000 | $ | 1,077,000 |
| Direct labor | $ | 240,000 | $ | 100,000 | $ | 340,000 |
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The company is considering implementing an activity based costing system that distributes all of its manufacturing overhead to four activities as shown below: |
| Activity Cost Pool (and Activity Measure) |
Manufacturing Overhead | Activity | ||||||
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| LE100 | UL600 | Total | ||||||
| Machining (machine hours) | $ | 400,000 | 36,000 | 135,000 | 171,000 | |||
| Setups (setup hours) | 300,000 | 150 | 600 | 750 | ||||
| Product level (number of products) | 200,500 | 2 | 2 | 4 | ||||
| General factory (direct labor dollars) | 120,000 | $ | 240,000 | $ | 100,000 | $ | 340,000 | |
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| Total manufacturing overhead cost | $ | 1,020,500 | ||||||
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| Required: |
| 1 a. | Compute the plantwide overhead rate that would be used in the company%u2019s conventional cost system. |
| Predetermined overhead rate | $ | per DL$ |
| 1 b. | Using the plantwide rate, compute the unit product cost for each product. |
| LE100 | UL600 | |
| Unit product cost
i’m looking for the unit product cost using the plantwide rate. i have no clue how to get it and i’ve been trying for quite some time. help please and show how you got it would be great. |