Consider the following data for two products of Vigano Manufacturing. (Round OH rate and cost per unit answers to 2 decimal places.)

	Product A	Product B
Number of units produced	11,500 units	2,000 units
Direct labor cost (@$29 per DLH)	0.11 DLH per unit	0.23 DLH per unit
Direct materials cost	$2.40 per unit	$2.20 per unit

Activity	Overhead costs
Machine setup		$	-13,690
Parts handling			58,000
Quality control inspections			104,040
		$	148,350

Activity Drivers	Product A	Product B
Number of machine setups required for production	11 setups	34 setups
Number of parts required	16 part/unit	6 parts/unit
Inspection hours required	56 hours	250 hours

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. Assume if the market price for Product A is $14 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. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B?
Machine setup
Materials handling
Quality control inspections
Overhead Assigned	Activity Driver		Activity rate		Total Overhead Cost
Product A
Machine setup
Materials handling
Quality control inspections
Product B
Machine setup
Materials handling
Quality control inspections
Total manufacturing costs		Product A	Product B
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
Should this information influence company strategy?