Time Bender Company makes watches and clocks. The following estimated data are available for the company's next fiscal year:Total direct labor costs: $1,700,000Total setup costs: $190,000?WatchesClocksExpected production800,000100,000Direct labor hours needed68,000 DLH17,000 DLHMachine setups needed1,000 setups1,000 setupsDetermine the setup cost per unit for the watches and the clocks if setup costs are assigned using a plantwide overhead rate based on direct labor hours. (Round to two decimal places.)
What will be an ideal response?
Watches:
68,000 DLH/85,000 DLH x $190,000 = $152,000 setup costs to watch line
$152,000/800,000 units = $0.19 per watch
Clocks:
17,000 DLH/85,000 DLH x $190,000 = $38,000 setup costs to clock line
$38,000/100,000 units = $0.38 per clock
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