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0 Problem #4: Game of Thrones (11 marks) Chill Furniture Inc. (CFI) produces two types of recliners: various luxury versions they refer to as
0 Problem #4: Game of Thrones (11 marks) Chill Furniture Inc. (CFI) produces two types of recliners: various luxury versions they refer to as their Throne product line and basic versions they refer to as their Chiller product line. In the past, the allocation basis used for overhead costs has been direct material. For 2020, CFI compiled the following Data: Throne Chiller Sales Units 80,000 370,000 Average selling price per unit $ 715.00 $ 480.00 Direct material cost per unit $ 114.00 $ 64.00 Direct labour cost per unit $ 94.00 $ 54.00 Manufacturing overhead costs per unit $ 200.00 $ 125.00 Total cost per unit $ 408.00 $ 243.00 Profit per unit $ 307.00 $ 237.00 In 2020, CFI purchased an expensive robotics system to allow for enhanced luxury options in the Throne product line. Sansa Tark, the CFO, suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next year's sales campaign. She obtained the following ABC ABC Information Activity Cost Driver Setups # of setups Machine Related # of machine hours $54,200,000 Rework Packing Required: $ Cost 600,000 Total Throne Chiller 500 400 100 # or reworks $ 700,000 # of shipments $ 6,750,000 600,000 1,000 250,000 300,000 900 50,000 300,000 100 200,000 $62,250,000 1. Using the activity-based costing data presented above, compute the revised total cost to manufacture one unit of each recliner product line. (6 marks)
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