Answer:
Average Cost Per Unit = $94.11
Explanation:
The activity rates for each activity cost pool are computed as follows:
Assembly = $942,480 / 66,000 machine-hours = $14.28 per machine-hour
Processing orders = $85,050 / 1,800 orders = $47.25 per order
Inspection = $126,854 / 1,820 inspection-hours = $69.70 per inspection-hour
The overhead cost charged to Product O37W is:
Assembly = $14.28 per machine-hour x 690 machine-hours = $9,853.20
Processing orders = $47.25 per order x 40 orders = $1,890
Inspection = $69.70 per inspection-hour x 10 inspection-hours = $697
Total Overhead Cost = 12,440.20
The Average Cost of Product O37W is:
Direct Material = 430 units x $35.72 per unit = $15,359.60
Direct Labor = 430 units x $29.46 per unit = $12,667.80
Overhead = $12,440.20
Total Cost = $40,467.60
Average Cost Per Unit = $40,467.60 / 430 Units = $94.11
