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10. Luzent Company produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2018,
10. Luzent Company produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2018, Luzent compiled the following data for the two products: Deluxe Standard Sales units 50,000 400,000 Sales price per unit Prime costs per unit Direct materials cost per unit Direct labor costs per unit Manufacturing support costs per unit $650.00 $180.00 $95.00 $75.00 $ 80.00 $475.00 $130.00 $75.00 $55.00 $120.00 Last year, Luzent Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2018: Activity Cost Driver Cost Total Deluxe Setups of setups $ 500,000 500 400 Machine-related of machine hours $44,000,000 600,000 300,000 Packing of shipments $5,000,000 250,000 50,000 Standard 100 300,000 200,000 Required: a. Using the current system, what is the estimated 1. total cost of manufacturing one unit for each type of door? 2. profit per unit for each type of door
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