The Homer Corporation produces two products, and reports the following production and cost information for the most recent accounting period. Product A Product BNumber of units produced 10,000units 2,000unitsDirect labor @ $20 per direct labor hour (DLH) 0.50DLH per unit 2.00DLH per unitDirect materials cost$2per unit $30per unitOverhead costs:Total Cost ActivityDriverProduct AProduct BMachine setup$1,200.00 setups5setups15setupsQuality inspections 24,000.00 inspections60inspections140inspectionsTotal$25,200.00 Using direct labor hours as the basis for assigning overhead costs, the total product cost per unit for Product A is:
A. $12.00 per unit
B. $13.40 per unit
C. $14.00 per unit
D. $70.00 per unit
E. $75.60 per unit
Answer: B
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