Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Roun your intermediate calculations and OH

image text in transcribed
image text in transcribed
image text in transcribed
Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Roun your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.) Number of units produced Direct labor cost (e $26 per DLH) Direct materials cost Product A 13,000 units 0.21 DLH per unit $ 1.50 per unit Product B 1,200 units 0.22 DLH per unit $ 2.50 per unit Activity Machine setup Materials handling Quality control inspections Overhead costs $ 99,460 59,000 96,030 $254,490 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 $29.99 and the market price for Product B is $60, 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 10 setups 16 Number of parts required 14 part/unit 4 part/unit Inspection hours required 56 hours 235 hours setups Machine setup 02 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 $ Total manufacturing costs Direct Materials per unit Product A Product B 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 4.2 Based on your results in part 4, should the profit or loss per unit for each product influence company strategy? NO Yes

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What The Numbers Mean

Authors: David H. Marshall, Wayne William Mcmanus, Daniel Marshall Viele, Mcmanus Marshall, Daniel F. Viele

10th Edition

1259060705, 978-1259060700

More Books

Students also viewed these Accounting questions

Question

Understand the use of different performance-rating techniques

Answered: 1 week ago