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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
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 13,eee units 1,388 units Direct labor cost (@$25 per DLH) 0.18 DLH per unit 2.25 DLH per unit Direct materials cost $ 2.48 per unit $ 2.5 per unit Activity Machine setup Materials handling Quality control inspections Overhead costs $134,778 58,eee 68,480 $261,178 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 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 $29.66 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 11 setups 16 setups Number of parts required 16 part'unit 11 part/unit Inspection hours required 60 hours 225 hours Machine setup Materials handling Quality control Activity Driver Activity Rate Total Overhead Cost Overhead Assigned Product A Machine setup Materials handling Quality control Product B Machine setup Materials handling Quality control Product A Product B Total manufacturing costs Direct Materials 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 Market price Product B 4.2 Based on your results in part 4 should the profit or loss per unit for each product Influence company strategy? Yes O No
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