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Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated minus sign. Round your intermediate calculations and OH rate and
Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal Product A Product B Number of units produced 10,500 units 1,500 units Direct labor cost (@ $30 0.12 DLH per 0.24 DLH per per DLH) unit unit Direct materials cost $ 2.30 per unit $ 2.10 per unit Activity Machine setup Materials handling Quality control inspections Overhead costs $ 30,020 61,000 69, 360 $160, 380 Required 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. Activity Driver OH Cost Plantwide OH rate Total Overhead Cost Units Produced per unit Overhead Assigned Product A Product B Product A Product B 2. If the market price for Product A is $22.9 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 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 28 setups Number of parts required 12 part/unit 9 part/unit Inspection hours required 54 hours 235 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 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 Product B Market price 4.2 Should this information influence company strategy? No Yes
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