Shakti Company budgets overhead cost of $72,000 for the year. The company reports the following for its standard and deluxe models.

 Shakti Company budgets overhead cost of $72,000 for the year. The company reports the following for its standard and deluxe models.
 

Cost per Unit    Standard    Deluxe
Direct materials    $ 12    $ 23
Direct labor    18    27
 
1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 6,000 direct labor hours.

2. The standard model uses 2 direct labor hours per unit and the deluxe model uses 3 direct labor hours per unit. Compute overhead cost per unit for each model.

3. Compute the total product cost per unit for both models.

 

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