Allen, Inc., manufactures bookcases and uses an activity-based costing system. Allen's activity areas and related data follow. Activity Budgeted Cost of Activity Allocation Base Cost Allocation Rate Materials Handling $22,000 Number of parts $0.90 Assembly $3,000,000 Direct labor hours $12.00 Finishing $170,000 Number of finished units $3.90 Allen produced two styles of bookcases in April: the standard bookcase and an unfinished bookcase, which has fewer parts and requires no finishing. The totals for quantities, direct material cost, and other data follow. Product Total Units Produced Total Direct Materials Cost Total Number of Parts Total Assembling Direct Labor Hours Standard Bookcase units2,000 total direct materials $29,600 total # of parts 82,000 total assembling direct labor hours 3,300 Unfinished Bookcase units 2,600 total direct materials $28,600 total # of parts 86,000 direct labor hours 2,000

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 bookcase at $5 each and to the unfinished bookcase at $4 each. Similar analyses were conducted of postmanufacturing activities such as distribution, marketing, and customer service. The postmanufacturing costs were $21 per standard bookcase and $18 per unfinished bookcase. Compute the full product costs 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 Allen's managers set for unfinished desks to earn a unit profit of $19?