Exercise 4-10 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 Product B Number of units 13,000 units 1,700 units produced Direct labor cost (@0.12 DLH per 0.27 DLH per $30 per DLH) unit unit Direct materials $ 2.10 per $ 2.70 per cost unit unit Activity Machine setup Materials handling Quality control inspections Overhead costs $ 16,690 62,000 103.020 $ 181,710 Required 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 Plantwide Driver OH rate Total Overhead Cost OH Units Produced Cost per unit Products Products Product A Product B 2. If the market price for Product A is $21.62 and the market price for Product B is $58, 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 11 setups required for production 14 setups Number of parts 1 16 part/unit 9 part/unit required Inspection hours 58 hours 245 hours required Machine setup HALL Materials handling Quality control Activity Driver Activity Rate Total Overhead Cost Overhead Assigned Product A Machine setup Materials handing 20 Y tro Product B Machine setup Materials and in Quality control Product A Product B Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per 4.2 Should this information influence company strategy? Yes No