Question
Crane Visuals produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers
Crane Visuals produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.
Activity Pool | Department Costs | Cost Driver | ||||
---|---|---|---|---|---|---|
Binding | $297,000 | Number of units | ||||
Printing | 955,500 | Machine hours | ||||
Product design | 234,000 | Change orders | ||||
General | 727,500 | None | ||||
Total overhead costs | $2,214,000 |
Other information is as follows:
Tablets | Books | ||||
---|---|---|---|---|---|
Units | 62,500 | 10,000 | |||
Direct materials cost per unit | $3.00 | $10 | |||
Direct labor cost per unit | $4.00 | $8.00 | |||
Direct labor hours | 30,000 | 19,200 | |||
Machine hours | 150,000 | 144,000 | |||
Change orders | 1,500 | 2,400 |
Cranes managers have gathered the following information about selling and administrative costs.
Activity Pool | Total Cost | Cost Driver | ||
---|---|---|---|---|
Shipping | $240,000 | Pounds shipped | ||
Advertising | 187,500 | Number of mailings | ||
Commissions | 168,125 | Sales price | ||
Total selling and administrative costs | $595,625 |
Tablets | Books | ||||
---|---|---|---|---|---|
Weight | 20,000 pounds | 40,000 pounds | |||
Advertising mailings | 25,000 | 100,000 | |||
Sales commission | 5% of sales price | 8.00% of sales price | |||
Selling price per unit | $35 | $150 |
(a)
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.
Using the information given here, calculate the product margin per unit for Tablets and Books using the traditional costing system. (Round all rates and final answers to 2 decimal places, e.g. 15.25.)
Tablets | Books | |||
---|---|---|---|---|
Product margin per unit | $ | $ |
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