Hone Corp. manufactures computer desks in its Philadephia, Pennsylvania, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow. (Click the icon to view the activity areas and related data.) Read the autem Requirement 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. (Complete all input fields. Enter a "O" for any zero amounts. Round your answers to the nearest whole dollar.) Standard Desk Unpainted Desk Direct materials Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities such as product design, were assigned to the Standard desks at $4 each and to the Unpainted desks at $2 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were 521 per Standard and $19 per Unpainted desk. Compute the full product costs per desk. Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference. are reported in the financial statements. Managers use for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting. However, these costs often are Requirement 4. What price should Hone's managers set for Standard desks to earn a 540 profit per desk? Sales price per unit - standard desk Requirements 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $4 each and to the Unpainted desks at $2 each. Similar analyses were conducted of post-manufacturing activities, such as distribution, marketing, and customer service. The post-manufacturing costs were 521 per Standard and $10 per Unpainted desk Compute the full product costs per desk. 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference 4. What price should Hone's managers set for Standard desks to earn a S40 profit per desk? 6 Data Table Budgeted Cost of Cost Allocation Activity Activity Allocation Base Rate Materials handling 270,000 Number of parts $ 0.70 Assembling $ 2,500,000 Direct labor hours $ 17.00 Painting $ 160,000 Number of painted desks S 5.10 Hone produced two styles of desks in March the Standard desk and Unpainted desk. Data for each follow Total Units Total Direct Total Number Total Assembling Product Produced Materials Costs of Parts Direct Labor Hours Standard desk 8,000 59,750 119,500 8,000 Unpainted desk 2.500 $ 31.450 29,500 1.200
