ABC Company manufactured bookcases and uses an activity-based- costing system. ABCs activity areas and related information are as follows:

Activity	Budgeted Cost of Activity	Allocation Base	Cost Allocation Rate
Materials Handling	200,000	Number of Parts	.80
Assembling	3,000,000	Direct Labor Hours	15.00
Finishing	160,000	Number of Finished Units	3.90

ABC produced two styles of bookcases in June: the standard bookcase and an unfinished bookcase, which has fewer parts per bookcase and requires no finishing. The total for quantities, direct materials costs, and other data are below:

Product	Total Units Produced	Total Direct Materials Costs	Total Number of Parts	Total Assembling Direct Labor Hours
standard	3000	26,000	80,000	3000
unfinished	3600	27,000	84,000	2000

1. Compute the manufacturing product cost per unit of each type of bookcase.

2. Suppose that premanufacturing activities, such as product design, were assigned to the standard bookcases at $4 each and to the unfinished bookcases at $3 each. The post manufacturing costs were $20 per standard bookcase and $15 per unfinished bookcase. Compute the full product cost per unit.

3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.

4. What price should ABC Company managers set for unfinished bookcases to earn a unit profit of $16?