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Exercise 7.29 Tamarisk Company uses an activity-based costing system. It has the following manufacturing activity areas, related drivers used as allocation bases, and cost allocation
Exercise 7.29 Tamarisk Company uses an activity-based costing system. It has the following manufacturing activity areas, related drivers used as allocation bases, and cost allocation rates Cost Cost Driver Activity Rate Machine setup Material handling Machining Assembly Inspection Number of setups Number of parts Machine hours Direct labour hours Number of finished units $ 50 0.6 24 20 12 During the month, 80 units were produced, requiring 3 setups. Each unit consisted of 20 parts and used 1.7 direct labour hours and 1.25 machine hours. Direct materials cost 120 per finished unit. All other manufacturing costs are classified as conversion costs. ABC costs for research and marketing costs are $160 per unit. All other nonmanufacturing ABC costs are $360 per unit. Calculate the manufacturing cost per unit for the period. (Round answer to 2 decimal places, e.g. 52.75. Cost per unit Calculate the total cost (manufacturing and nonmanufacturing costs) per unit for the period. (Round answer to 2 decimal places, e.g. 52.75.) Total cost per unit Suppose Tamarisk Company's managers want to implement target costing. Under target costing, the managers need to determine the amount of cost savings that must be achieved to earn a desired level of profit. If thy must set a competitive price of $731.88 and require a 10% profit based on th total cost calculated in the previou part, howmuch cost savings must they gnerate? Round answer to 2 decimal places, e.g. 52.75.) Cost savings required
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