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Fremont Systems produces two different products, Product A, which sells for $1,000 per unit, and Product B, which sells for $2,000 per unit, using three
Fremont Systems produces two different products, Product A, which sells for $1,000 per unit, and Product B, which sells for $2,000 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Usage by Product A Product B Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 150,000 400 600 $5,000,000 2,000 6,000 $ 300,000 90 30 Fremont manufactures 10,000 units of Product A and 7,500 units of Product B per month. Each unit of Product A uses $500 of direct materials and $200 of direct labor, while each unit of Product B uses $750 of direct materials and $350 of direct labor. Required: a. Calculate the Design activity proportions for Products A and B Design Activity Proportions % Product A Product B b. Calculate the Machining activity proportions for Products A and B Machining Activity Proportions Product A Product B c. Calculate the Inspection activity proportions for Products A and B Inspection Activity Proportions % % Product A Product B d. Determine the indirect costs assigned to Product A. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Indirect Costs e. Determine the indirect costs assigned to Product B. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Indirect Costs . Determine the manufacturing cost per unit for Product A. (Do not round intermediate calculations. Round your final answers to decimal places.) Manufacturing Cost per unit g. Determine the manufacturing cost per unit for Product B. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Manufacturing Cost per unit h. Determine the gross profit per unit for Product A. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) per unit Gross Profit Determine the gross profit per unit for Product B. (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) per unit Gross Profit
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