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)
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) Number of units produced Direct labor cost (@ $23 per DLH) Direct materials cost Product A 12,500 units 0.19 DLH per unit $ 2.30 per unit Product B 1,200 units 0.28 DLH per unit $ 2.30 per unit Activity Machine setup Materials handling Quality control inspections Overhead costs $121, 492 52,000 75,920 $249, 412 Required 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. Overhead costs $ 92.00 per direct labor hour 249,412 s 2,711 Direct labor hours Activity Driver Plantwide OH rate Total Overhead Cost Overhead Assigned Product A OH Cost per Units Produced unit 12,500 $ 12.48 4 nr 70 92.00 $ 2,375 $ bas 218,500 2009 Didint nonal Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost 2,375 $ 92.00 $ 218,500 336 $ 92.00 $ 30,912 OH Cost per Units Produced unit 12,500 $ 12.48 $ 25.76 Product A 1,200 Product B $ Total manufacturing cost per unit: Direct material cost per unit Direct labor cost per unit Overhead cost per unit Total manufacturing cost Product A 2.30 $ 4.37 12.48 Product B 2.30 6.44 25.76 34.50 $ 19.15 $ 2. If the market price for Product A is $30.39 and the market price for Product B is $59, 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 setups 14 setups Number of parts required 6 part/unit 7 part/unit Inspection hours required 62 hours 230 hours 4 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 4 14 setups Number of setups required for production setups 6 part/unit 7 Number of parts required part/unit 62 hours 230 Inspection hours required hours Machine setup 0 Materials handling Quality control 0 Overhead Assigned Activity Driver Total Overhead Cost Activity Rate Product A Machine setup Materials handling Activity Rate Total Overhead Cost Overhead Assigned Activity Driver Product A Machine setup Materials handling Quality control $ 0 Product B Machine setup Materials handling Quality control $ 0 Product A Product B Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per unit Direct viaterials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per unit 4. Determine the profit or loss per unit for each product assuming ABC costing. Product A Product B Market price 5 4.2 Should this information influence company strategy? Yes O No
