Sonoma Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below:
Cost Drivers by Product
Activity Cost Pool Cost Driver Est. Overhead Budget Deluxe
Ordering and Receiving Orders $ 120,000 600 400
Machine Setup Setups 297,000 500 400
Machining Machine hours 1,000,000 150,000 100,000
Assembly Number of Parts 1,600,000 1,400,000 800,000
Inspection Inspections 300,000 550 450
- Compute the estimated overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. Round your answer to the nearest cent.
- Assume Sonoma used a more traditional OH allocation method and used only machine hours to allocate MOH. How much overhead would be assigned to each product and what are the estimated unit OH for each product?
- The company estimates that DM costs for the Budget model are $2.10 per unit and the DL costs are $3.40. The DM costs for the Deluxe model are $9.40 and the DL costs are $4.10.
- The company has received three orders, Customer A wants 1000 units of the budget tape vacuum, Customer B wants 3000 units of the budget item and 4000 units of the deluxe item and Customer C wants 10,000 units of the Deluxe model. The requirements for each job are listed below:
Calculate the total costs for each customer’s job and the unit costs for each product in their order.
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