(b)How much overhead will be assigned to each product if direct labor cost is used to allocate overhead?What is the total cost per unit produced for each product? (Do not round intermediate calculations.Round "Overhead" to the nearest whole dollar and "Total Cost Per Unit" to 2 decimal places.)4.Isadore's Implements, Inc., manufactures pens and mechanical pencils often used for gifts. Overhead costs are currently allocated using direct labor-hours, but the controller has recommended an activity-based costing system using the following data:Cost DriverVolumeActivityCostDriverCostPencilsPensSetting upNumber of setups$94,000 18 InspectingNumber of parts37,200 5 Packing and shippingNumber of boxes shipped75,000 45,000 80,000 Total overhead$206,200 Required:(a)Compute the amount of overhead to be allocated to each product under activity-based costing.(Do not round intermediate calculations. Round "Overhead" to the nearest whole dollar.)(b)Compute the amount of overhead to be allocated to each product using labor-hours as the allocation base. Assume that the number of labor-hours required to assemble each box is 0.1 for pencils and 0.1for pens and that 45,000 boxes of pencils and 80,000 boxes of pens were produced during the period. (Do not round intermediate calculations. Round "Overhead" to the nearest whole dollar.)29 7
5.Ms. Kay's Company makes two products: Product A and Product B. Annual production and sales are2,500 units of Product A and 2,100 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.20 directlabor hours per unit and Product B requires 0.70 direct labor hours per unit. The total estimated overheadfor next period is $169,720.The company is considering switching to an activity-based costing system for the purpose of computingunit product costs for external reports. The new activity-based costing system would have three overheadactivity cost pools--Activity 1, Activity 2, and General Factory--with estimated overhead costs andexpected activity as follows:Expected ActivityActivity Cost PoolEstimatedOverheadCostsProduct AProduct BTotalActivity 1$60,225 2,600 1,050 3,650 Activity 227,740 2,500 420 2,920 General Factory81,755 750 1,260 2,010 Total$169,720 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor hours.)The overhead cost per unit of Product B under the traditional costing system is closest to: (Round your final answer to 2 decimal places.)$60.31.$17.23.$16.50.$9.50.