Cooke Company Manufactures Two Products, Product F and Product G

Essay

Cooke Company manufactures two products, Product F and Product G. The company expects to produce and sell 1,400 units of Product F and 1,800 units of Product G during the current year. The company uses activity-based costing to compute unit product costs for external reports. Below are current year data for the company's three activity cost pools:
$\begin{array}{llrrr}&&&\text { Total Activity }\\\text { Activity Cost Pool } & \text { Total Cost } & \text { Product } F & \text { Product } G & \text { Total }\\\text { Machine setups } & \$ 10,800 & 80 \text { setups } & 100 \text { setups } & 180 \text { setups } \\\text { Purchase orders } & \$ 77,520& 510 \text { orders } & 1,010 \text {orders } & 1,520 \text { orders } \\\text { General factory } & \$ 75,920& 2,240 \text {hours } & 3,600 \text {hours } & 5,840 \text { hours }\end{array}$
Required:
Using the activity-based costing approach, determine the overhead cost per unit for each product.