Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places)

	Product A	Product B
Number of units produced	12,000 units	1,300 units
Direct labor cost(@$29 per DLH)	0.12 DLH per unit	0.23 DLH per unit
Direct materials cost	$ 1.6 per unit	$ 2.8 per unit

Activity	Overhead costs
Machine setup		$	-8,455
Materials handling			58,000
Quality control			98,270
		$	147,815

1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line.
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Product A
Product B
		Product A	Product B
2. If the market price for Product A is $20.4 and the market price for Product B is $63, determine the profit or loss per unit for each product.
		Product A	Product B
Market price
3. Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B?
	Product A		Product B
Number of setups required for production	8	setups	18	setups
Number of parts required	6	part/unit	8	part/unit
Inspection hours required	62	hours	255	hours
Machine setup
Materials handling
Quality control
Overhead Assigned	Activity Driver		Activity rate		Total Overhead Cost
Product A
Machine setup
Materials handling
Quality control
Product B
Machine setup
Materials handling
Quality control
Total manufacturing costs		Product A	Product B
Direct Materials per unit
Direct Labor per unit
Overhead per unit
Total manufacturing cost per unit
4. If the market price for Product A is $20.4 and the market price for Product B is $63, determine the profit or loss per unit for each product assuming ABC costing.
		Product A	Product B
Market price

Should this information influence company strategy?

	No
	Yes