Exhibit 3Specialty Products Inc., manufactures household items sold at trade shows. The items,classified as either Trinkets or Widgets, are manufactured on a common assembly line. Otherthan indirect labor (discussed further below), the plant operates at full capacity.The current cost accounting system allocates all overhead to the two products on the basis ofmachine hours. The following information applies to the month of July:TrinketsWidgetsTotalNumber of Batches Produced8035115Number of Units24003502750Number of Machine Hours16001751775Number of Inspections16070230Number Engineering Changes134Direct Labor Salary & Benefits per Unit$40Direct Material per Unit$26$14$8The General Ledger also shows that the following amounts were spent on indirect resources:Indirect Labor Salaries and Benefits$36,000Computer ResourcesUtilities & Misc. Other$12,000$25,000$73,000A.REQUIRED: Using the current cost accounting system, what cost per unit would be reportedfor the two products for the month of July?Trinket $unitWidget $unit
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