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12 Eastern Chemical Company produces three products. The operating results of the current year are 01 Product Quantity Target ACTUA Price Pesce 1,191.00 $252.00
12 Eastern Chemical Company produces three products. The operating results of the current year are 01 Product Quantity Target ACTUA Price Pesce 1,191.00 $252.00 Difference 330.00 $107.50 The firm sets the target price of each product at 150% of the product's total manufacturing cost. It appears that the f was ate to sell Product C at a much higher price than the target price of the product and lost money on Product 8 Tom Watson, CEO wants promote Product C much more aggressively and phase out Product B. He believes that the information suggests that Product Chas the greatest potentat among the firm's three products because the actual selling price of Product C was almost 50% higher than the target price, while the firm was forced to sell Product B at a price below the target price Both the budgeted and actual factory overhead for the current year are $640,000. The actual unts sold for each product also i same as the budgeted unts. The firm uses direct labor dollars to assign manufacturing overhead costs. The direct materials and direct labor costs per unit for each product are $110.4 533840 Total arie s The cooler noticed that not all products consumed factory overhead similarly Upon further investigation, she identified the following usage of factory overhead thuring the year ber of set Quality inspections niiiey (achine hours) Tal Product N Required 1 Determine the manufacturing cost per unit for each of the products using the volume-based method 2. What is the least profitable and the most profitate product under both the current and the ABC systems 3. What is the new target price for each product based on 150% of the new costs under the ABC system? Compare the price with the actual selling price Help
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