Fanning Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Fanning uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Model ZM Direct materials $20.30 Direct labor 28.60 Model DS $7.00 9.00 Category Unit level Batch level Product level Facility level Total Estimated cost $ 25,960 47,840 90,000 180,000 $343,800 Cost Driver Number of units Number of setups Number of TV commercials Number of machine hours Use of Cost Driver ZM: 2,450 units; DS: 9,350 units ZM: 26 setups; DS: 26 setups ZM: 15; DS: 10 ZM: 300 hours; DS: 600 hours Fanning's facility has the capacity to operate 2,700 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $118 and for DS is $73. If Fanning sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert believes that Fanning can sell as many cameras as it can produce by pricing Model ZM at $113 and Model DS at $33. Fanning would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $118 and for DS is $73. If Fanning sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert believes that Fanning can sell as many cameras as it can produce by pricing Model ZM at $113 and Model DS at $33. Fanning would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.) Direct Materials Direct Labor Allocated Overhead Total Type of Product Model ZM Model DS 0.00 + + 0.00 Complete this question by entering your answers in the tabs below. Required A Required B Required The current market price for products comparable to Model ZM is $118 and for DS is $73. If Fanning sold all of its products at the market prices, what was its profit or loss for the previous month? (Round intermediate calculations to 2 decimal places. Loss amounts should be indicated by a minus sign.) Amount Model ZM Model DS Profit Profit
