Exercise 17-12 Using ABC for strategic decisions LO P1, P3 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.) Product A Products Number of units produced 12,000 units 1,200 units Direct labor cost (e $31 per DLH) 0.15 DLH per unit 0.24 DLH per unit Direct materials cost $ 1.70 per unit $ 2.50 per unit Activity Machine setup Materials handling Quality control inspections Overhead costs $ 59,224 59,000 65,520 $183, 744 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. o per direct labor hour Overhead costs Direct labor costs Overhead Assigned Acti Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Product A Product B Product A Product B 2. If the market price for Product A is $24.67 and the market price for Product B is $56, 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 9 setups 28 setups Number of parts required 10 part/unit 8 part/unit Inspection hours required 58 hours 215 hours Machine setup Materials handling Quality control of Overhead Assigned Activity Driver Activity Rate Total Overhead + Product A Machine setup Materials handling Quality control $ 0 es Product B Machine setup Materials handling Quality control $ 0 Product A Product B Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per unit eBook 4. Determine the profit or loss per unit for each product assuming ABC costing. Product A Hint Product B Print Market price References 4.2 Based on your results in part 4, should the profit or loss per unit for each product influence company strategy? Yes O No