Is the net of the Total Profit per Unit using POHR (Part 1) a profit or a loss?

Is the net of the Total Profit per Unit using ABC (Part 3) a profit or a loss?

For Part 271, did the Overhead Per Unit increase or decrease, and by how much, from using POHR to ABC?

For Part 342, did the Overhead Per Unit increase or decrease, and by how much, from using POHR to ABC?

Is there a scenario where on a one-to-one basis, the overall per unit Total Profit is actually a profit and not a loss?

What kind of price increase per unit does it take to make Part 342 profitable?

What recommendation would you make to the client if you were the presenting partner?

Activity-based Costing Project CarTech Manufacturing Part 1: Compute overhead and gross margin using traditional costing. Per unit Part 271 Part 342 Selling Price $31.86 $24.00 Product Cost Prime costs $9.53 $8.26 Overhead $12.83 $5.77 Total Product Cost $22.36 $14.03 Total Profit $9.50 $9.97 GIVEN INFORMATION Part 271 Production 500,000 Selling Price $31.86 Prime costs per unit $9.53 Number of production runs 100 Receiving orders 400 Machine hours 125,000 Direct labor hours 250,000 Engineering hours Material moves 500 Time to produce 1 unit (bour) 0.5 Part 342 100,000 $24.00 $8.26 200 1,000 60,000 22,500 5,000 400 0.225 5,000 Part 2: Select the best cost driver and compute overhead rates for each cost pool. Cost Pool Cost Driver Overhead Rate Setup costs Production runs $800.00 per R Material handling costs Material moves $1,000.00 per Move Machine costs Machine hours $9.46 per MH Receiving costs Receiving orders $1,500.00 per Order Engineering costs Engineering hours $150.00 per EH General plant costs Direct labor hours $1.83 per DLH Overhead Cost Pools Setup costs Material handling costs Machine costs Receiving costs Engineering costs General plant costs Total $240,000 $900,000 $1,750,000 $2,100,000 $1,500,000 $500,000 $6,990,000 POHR $25.65 Part 3: Compute overhead and gross margin using Activity-based costing. Per unit Part 271 Part 342 Selling Price $31.86 $24.00 Product Cost Prime costs $9.53 $8.26 Overhead $7.14 $34.19 Total Product Cost $16.67 $42.45 Total Profit $15.19 ($18.45) Part 4: Recommendations - Increase in price for Part 342 by 25%. Per unit Part 271 Part 342 Selling Price $31.86 $30.00 Product Cost Prime costs $9.53 $8.26 Overhead $7.14 $34.19 Total Product Cost $16.67 $42.45 Total Profit $15.19 ($12.45) ABC Overbead (DLH for General Part 271 Setup costs $80,000 Material handling costs $500,000 Machine costs $1,182,432 Receiving costs $600,000 Engineering costs $750,000 General plant costs $458,716 Direct labor hours $3,571,148 Overhead Rate per Part $7.14 Part 342 $160,000 $400,000 $567,568 $1,500,000 $750,000 $41,284 $3,418,852 $34.19 Part 5: Recommendations - Prime Cost for both decreases $1.50, Selling Price Part 271 reduced 25% Per unit Part 271 Part 342 Selling Price $23.90 $24.00 Product Cost Prime costs $8.03 $6.76 Overhead $7.14 $34.19 Total Product Cost $15.17 $40.95 Total Profit $8.72 ($16.95) Part 6: Recommendations - VARIED BASED ON YOUR SUGGESTED SCENERIO Per unit Part 271 Part 342 Selling Price $0.00 $0.00 Product Cost Prime costs $0.00 $0.00 Overhead $0.00 $0.00 Total Product Cost $0.00 $0.00 Total Profit $0.00 $0.00