Reference no: EM131823946

Question - Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard. Manufacturing overhead has been applied on the basis of direct labor hours. Bayline gathers some activity information and is interested in implementing an activity-based costing system. The company wants all overhead costs to be allocated to products. The overhead cost pools and activity drivers are as follows:

Activity Pool	Overhead Costs	Total Driver Usage
Machine setup	$36,000	1,000 setups
Cutting/Assembly	62,000	31,000 machine hours
Total overhead costs	$98,000

Other product information is as follows:

	Beginner	Longboard
Units produced	40,000	15,000
Direct material cost per unit	$10	$25
Direct labor cost per unit	$8	$10
Direct labor hours	6,000	8,000
Machine setups	750	250
Machine hours	20,000	11,000

Required:

Compute the total unit costs for each product using direct labor hours as the allocation base.

Compute the total unit costs for each product using machine hours as the allocation base.

Compute the total unit costs for each product using activity-based costing.