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(b) Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. Production takes 25, 25, and 10 machine hours
(b) Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. Production takes 25, 25, and 10 machine hours to manufacture 1000-unit batches of brass, chrome and white faucets, respectively. The following additional data apply: Projected sales in units PER UNIT data: Selling price Direct materials Direct labor BRASS CHROME WHITE 30,000 50,000 40,000 $40 $20 $30 58 S4 $8 $15 $3 $9 Hours per 1000-unit batch: Direct labor hours 40 Machine hours 25 Setup hours 1.0 Inspection hours 30 2228 10 30 25 10 0.5 1.0 20 20 Total overhead costs and activity levels for the year are estimated as follows: Activity levels Activity Overhead costs Direct labor hours Machine hours Setups Inspections 2,900 hours 2,400 hours $465,500 95 setup hours $405.000 $870.500 2,700 inspection hours Required: (10 marks) i Using direct labor hours to allocate overhead costs (traditional costing system). determine the operating profit per unit for the Chrome style of faucet. Correct to 2 decimal places. 2
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