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 ( $27 per DLH) Direct materials cost Product A 13,000 units 0.16 DLH per unit $ 1.70 per unit Product B 1,900 units 0.25 DLH per unit $ 2.90 per unit Activity Machine setup Materials handling Quality control inspections Overhead costs $118,915 52,000 66,700 $237,615 Required 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. $ 237,615 $ 93.00 per direct labor hour 2,555 Overhead costs Direct labor hours Overhead Assigned Product A Product B Units Produced Activity Driver Plantwide OH rate 2,080 $ 93.00 475$ 93.00 soon! Total Overhead Cost $ 193,440 $ 44,175 13,000 1,900 OH Cost per unit $ 14.88 S 23.25 Product A 1.70 Product B 2.90 $ Total manufacturing cost per unit: Direct material cost per unit Direct labor cost per unit Overhead cost per unit Total manufacturing cost 14.88 16.58 23.25 26.15 $ $ 2. If the market price for Product A is $27.14 and the market price for Product B is $62, determine the profit or loss per unit for each product. Product A Product B Market price $ 27.14 $ 62.00 Manufacturing cost per unit (16.58) (26.15) Profitfloss) per unit 10.56 $ 35.85 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 Products Number of setups required for production 10 setups 18 setups Number of parts required 6 part unit 12 partunit Inspection hours required 60 hours 230 hours $ 118,915 0 | Machine setup Overhead costs Number of setups Materials handling Overhead costs Number of parts Quality control Overhead costs Inspection hours 52, 000 0 is 66. 700 0 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 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 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 Market price Product B 4.2 Should this information influence company strategy? No Yes
