DATA
Product Data
Model A Model B Total
Units produced per year 30,000 300,000
Prime costs $100,000 $1,000,000
Directs labor hours 140,000 300,000 440,000
Machine hours 20,000 200,000 220,000
Production runs 40 60 100
Inspection hours 800 1,200 2,000
Maintenance hours 10,000 90,000 100,000
Total overhead costs:
Setup costs $180,000
Inspection costs 140,000
Machining 160,000
Maintenance 180,000
Total $660,000
Cost Activity Activity Rate
Setup costs $180,000 100 $1,800.00
Inspection costs 140,000 2,000 $70.00
Machining 160,000 220,000 $0.73
Maintenance 180,000 100,000 $1.80
Overhead rate:
$1.50
