Exercise 17-10 Consider the following data for two products of Gitano Manufacturing. Using ABC for strategic decisions Product A 10,000 units 0.20 DLH per unit 0.25 DLH per unt Overhead Cost Product B P1 P3 2,000 units Number of units produced Direct labor cost (@ $24 per DLH). Direct materials cost $2 per unit $3 per unit Activity Machine setup Materials handling Quality control inspections $121,000 48,000 80,000 $249,000 Required . Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. or loss per unit for each product. Comment on the results. signing overhead costs to products, what is the cost per unit fo 2. If the market price for Product A is $20 and the market price for Product B is $60, determine the profit check (2) Product B, $26.10 per unit profit a. Consider the following additional information about these two product lines. If ABC is used for as- Product A ProductB 12 setups 3 parts/unit 210 hours Number of setups required for production......... .. 1 part/unit 40 hours Inspection hours required *. Determine the profit or loss per unit for each product. Should this information influence company (4) Product B, $(24.60) per unit loss strategy? Explain. Exercise 17-10 1. Total direct labor hours: Calculated As: Product A: Product B: LH LH Total direct labor hrs Calculated As: Plant-wide overhead rate: PRODUCT A PRODUCT B Direct materials A: # units x $/unit B: # units x $/unit Direct labor A: # DLH x $/DLH B: # DLH x $/DLH Overhead A: # DLH x $/DLH B: # DLH x $/DLH Total manufacturing cost Number of units Manufacturing cost per unit 2 PRODU PRODUCT B Price per unit Cost per unit Profit (loss) per unit 2 PRODUCTA PRODUCT B Price per unit Cost per unit Profit (loss) per unit Tyne vour analysis here 3. Overhead rates: Calculated As: Machine setup Material handling Quality control setup part insp hr PRODUCTA PRODUCTB Direct Materials (from part 1) Direct labor (from part 1) Overhead Machine setup A: # setups x $/setup B: # setups x $/setup Material Handling A: # parts x $/part B: # parts x $/part Quality control A: # insp. hr. x $insp. hr. B: # insp. hr. x $/insp. hr. Total manufacturing cost + Number of units Manufacturing cost per unit PRODUCTA PRODUCTB Price per unit Cost per unit Profit (loss) per unit Type vour analysis here