Chapter 5

Munoz Sporting Goods Corporation makes two types of racquets. tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system fo activity-based costing. The following are the cost data that Jane Price, the cost occountant. prepared for the thilid quarter of 2018 (during which Munoz made 72,000 tennis racquets and 30,200 badminton racquets). Inspectots are paid according to the number of actual hours worked. which is determined by the number of racquets inspected. Engineers who set up equipment for both products are pald monthly salaries. TV commercial fees are paid at the beginning of the quanter. Focilty level cost includes depreciation of all production equipment. Required a. Compite the cost per unit for each product. b. If management wants to pilce badminton racquets 30 percent above cost. what price should the company set