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Health Solutions, Inc. makes two types of health bars and is implementing an ABC system. Previously, all overhead totaling $81,000 had been applied on the basis of machine hours (9,000 total for the period; 5,000 for Nutty Bars and 4,000 for Raisin Bars). The company produces 22,500 units of Nutty Bars and 42,284 units of Raisin Bars. Additional data is as follows:

Cost Driver and

Estimated

   
 

Estimated Level

Overhead

Use of Cost Driver

Use of Cost Driver

Cost Pool

of Activity

Cost

by Nutty Bars

by Raisin Bars

Equipment Setup

100 setups

$20,000

65 setups

35 setups

Materials Ordering

140 orders

$21,000

95 orders

45 orders

Quality Control

200 inspections

$22,000

150 inspections

50 inspections

Mixing

9,000 machine hours

$18,000

5,000 machine hours

4,000 machine hours


What is the overhead cost per unit for Nutty Bars when all overhead is applied based on machine hours using one plantwide rate? (Hint: Start by calculating the predetermined overhead rate per machine hour.)

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