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Question
Time Bender Company makes watches and clocks. The following estimated data are available for the companys next fiscal year:
Total direct labor costs: $1,700,000
Total setup costs: $190,000
| Watches | Clocks | |
| Expected production | 800,000 | 100,000 |
| Direct labor hours needed | 68,000 DLH | 17,000 DLH |
| Machine setups needed | 1,000 setups | 1,000 setups |
Determine 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.)
Answer
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