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HORTON SPORTING GOODS CORPORATION Overhead Cost Allocation der ABC: Unit Batca Product Facilita Total Cost pool Cost drivers nep Hours # Setups Domm Hlach. Hrs 2 Base rate Batch Product Facility Total 5 6 7 18 19 20 21 22 Overhead Allocation for Tennis Racket Weight Rote Allocation Unit Batch Product 24 25 Facility Total Orerhead Allocation Badminton Racket Weight Rate Allocation 27 28 29 30 Total OH Cost 1 of Uaits OH Cost Per Unit 32 Orerhead Cost Per Unit Tcf Racket Badminton Backet Combined Totale 34 35 36 37 198 Direct Materials Direct Labor Allocated Orerhead Total Ipe of Product This Racket Badminton Rocket b. Price for badminton racket at 302 orer cost 20 40 42 46 44 45 46 47 43 49 50 Cost per Unit Profit Margia Price c. Min price for tesis rackets Direct Materials - Direct Labor Orerhead Misine Allocated Prics HORTON SPORTING GOODS CORPORATION Direct Cost/Unit Direct Materials Direct Labor Tennis Badminton Racket (TR) Racket (BR) $ 28 $ 20 34 28 Category Unit-Level Batch-Level Product-Level Facility-Level Total Estimated Cost Cost Driver $ 750.000 No. of inspection hours 250.000 No. of setups 150.000 No. of TV commercials 650.000 No. of machine hours $ 1.800.000 Amount of Cost Driver (TR) (BR) 15.000 10.000 80 45 4 30.000 35.000 Additional Information: Tennis rackets produced Badminton racquets produced 70.000 30 000 B54 fo A B 22 23 Crethe Allocation 24 Badminton Racket Unit Batchi Product Facility Toll 25 Weight 10.000 45 35.000 26 x Rate $ 30 $ 2.000 $ 30.000 $ 10 27 Allocation $ 300.000 $ 90.000 $ 30.000 $ 350.000 $ 70.000 28 29 30 Overhead Cost Total OH OH Cost 31 Per Unit Cost # of Units Per Unit 32 Tennis Racket $ 1.030.000 70.000 $ 14,71 33 Badminton Racket 770.000 30.000 $ 25,67 Cors 34 Combined Totals $ 1.800.000 35 Donec 36 37 Direct Direct Allocated 38 Type of Product Materials Labor Overhead Total 39 Tennis Racket $ 28,00 $ 34,00 $ 14,71 $ 76,71 Com 40 Badminton Racket 20,00 $ 28,00 $ 25,67 $ 73,67 Core 41 42 43 b. Price for badminton racket at 30% over cost 44 45 + Profit 46 cost per Unit Margin Price $ 73.67 $ 22,10 5 95,77 48 Correc 49 50 c. Minimum price for tennis rackets 51 Direct Materials 52 53 54 55 +Direct Labor + Overhead Allocated Minimum Price

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