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  • Company ABC produces two products, A and B. Product A requires 2 units of direct materials and 1 hour of direct labor, while Product B requires 3 units of direct materials and 2 hours of direct labor.
  • The unit costs for direct materials are $10 for Product A and $15 for Product B, while direct labor costs are $20 per hour.
  • The company incurred $5,000 in manufacturing overhead costs during the period.

• Requirements:

  • Calculate the total manufacturing cost for each product.
  • Determine the total cost of goods manufactured for both products combined.
  • Analyze the cost differences between the two products.
  • Provide recommendations for cost optimization.