Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I Am having issues with question 4.1 and 4.2. I though I just needed to multiply gross per unit with Units purchased. hat does not
I Am having issues with question 4.1 and 4.2. I though I just needed to multiply gross per unit with Units purchased. hat does not seem to be the case
Product A Product B $ 24 per unit $15 per unit Direct materials Direct labor hours Machine hours Batches Volume Engineering modifications Number of customers Market price 0.3 DLH per unit 1.6 DLH per unit 0.1 MH per unit1.2 MH per unit 125 batches 10,000 units 12 modifications 58 modifications 500 customers 225 batches 2,000 units 400 customers $ 30 per unit $ 120 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows Costs Driver Indirect manufacturing Engineering support Electricity Setup costs $24,500 Engineering modifications 34.000 Machine hours 52,500 Batches Nonmanufacturing Customer service 81.000 Number of customers 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours 17.90 per direct labor hour ve Direct labor hours6,200 Activity Driver Plantwide OH rate Total Overhead Cost OH Cost per unit Overhead Assigned Product A Product B Units Produced 3,000 17.90 S 17.90S 10,000 5.37 ,000 28.64 53,700 3,200 S 57,280 Product A Product B 24.00 32.00 28.64 84.64 Total manufacturing cost per unit: Direct material cost per unit Direct labor cost per unit Overhead cost per unit 15.00S 6.00 5.37 lotal manufacturing cost 26.37 S 1.2 What is the gross profit per unit? Product A Product B 120.00 (84.64) 35.36 Market price Manufacturing cost per unit 30.00 S (26.37) Gross profit per unit 3.63 $ 2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate? 3.63 S Gross profit per unit Units purchased per customer 35.36 20 Gross profit per customer 72.60 S 176.80 2.2 What is the cost of providing customer service to each customer? per customer costs Number of customers 900 Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product A Product B 72.60 S 176.80 90.00 86.80 Yes Gross profit per customer Customer service cost per 90.00 customer (17.40) S Profit (loss) per customer Is the profit adequate? 0 3.1 Determine the manufacturing cost per unit of each product line using ABC Engineering Support S 24,500 70 350.00 per modification Electricity S 34,000 10.00 per machine hour 3,400 Setup S 52,500 350 150.00 per batch Total Overhead Cost Overhead Assigned Activity Driver Activity rate Product A Engineering 4.200 10,000 18,750 32.,950 10,000 3.30 12 modifications 350.00 per modification support Electricity Setup Total overhead costs assigned Total units producerd Overhead cost per unit 1,000 10.00per machine machine hours hour 125 batches 150.00 per batch Product B Engineering 58 modifications 50.00 per modification 10.00 per machine 50.00 per batch 20,300 24,000 33,750 S 78,050 2,000 39.03 support Electricity Setup Total overhead costs assigned Total units produced Overhead cost per unit 2.400machine hours hour 225 batches Product A Product B Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per unit 15.00S 24.00 32.00 39.03 95.03 6.00 3.30 24.30 SStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started