Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ASAP! Problem 17-1A Comparing costs using ABC with the plantwide overhead rate LO P1, P3, A1, A2 The following data are for the two products
ASAP!
Problem 17-1A Comparing costs using ABC with the plantwide overhead rate LO P1, P3, A1, A2 The following data are for the two products produced by Tadros Company Product A Product B Direct materials $15 per unit $26 per unit Direct labor hours 2.4 DLH per unit 1.5 DLH per unit Machine hours 2.3 MH per unit 1.1 MH per unit Batches 110 batches 220 batches Volume 10,000 units 2,800 units Engineering modifications 9 modifications 45 modifications Number of customers 500 customers 400 customers Market price $35 per unit $120 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing Engineering support Electricity Setup costs Nonmanufacturing Customer service $25,eee Engineering modifications 26,080 Machine hours 43,800 Batches 70.000 Number of customers 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Overhead costs $ 94.000 $ 13.43 per direct labor hour Direct labor hours 7,000 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Product A Product B Product A Product B 1.2 What is the gross profit per unit? Product A Product B Market price Gross profit per unit 2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate? Product A Product B Gross profit per unit Units purchased por customer Gross profit per customer 2.2 What is the cost of providing customer service to each customer? Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product A Product B Che CETUS UUSUT PUUSET SIVILE w war USWIET 0 Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product A Product B Gross profit per customer Customer service cost per customer Profit (loss) per customer Is the profit adequate? 3.1 Determine the manufacturing cost per unit of each product line using ABC. Engineering Support 0 Electricity 0 Setup Activity Driver Activity rate Total Overhead Cost Overhead Assigned Product A Engineering support Electricity Setup S Product B Engineering support Electricity Setup $ Check $ 0 Product A Product B Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per unit 3.2 What is the gross profit per unit? Product A Product B Market price (26.35) (86.25) 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product A Product B (26.35) (86.25) 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product A Product B Units purchased per customer Gross profit (loss) per customer 4.2 is the gross profit adequate for each customer of Product A and B using ABC? Product A Product B Gross profit (loss) per customer Customer service cost per customer Profit (loss) per customer Is the profit adequate using ABC? 5. Which method of product costing gives better information to managers of this company? Method of product costing for better information Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started