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Johnston Corp. manufactures computer desks in its Austin, Texas, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and
Johnston Corp. manufactures computer desks in its Austin, Texas, 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 requirements. Requirement 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. (Complete all input fields. Enter a "0" for any zero amounts. Round your answers to the nearest whole dollar.) Direct materials Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Data table Standard Desk Unpainted Desk Budgeted Cost Cost Allocation Activity of Activity Allocation Base Rate Materials handling $ 320,000 Number of parts 0.90 Assembling $ 2,800,000 Direct labor hours 16.00 Painting 160,000 Number of painted desks $ 5.00 Johnston produced two styles of desks in March: the Standard desk and Unpainted desk. Data for each follow: Total Product Units Produced Standard desk ..... 6,000 $ Total Direct Materials Costs 96,450 Total Number Total Assembling of Parts Direct Labor Hours 119,500 6,000 Unpainted desk .... 3,000 $ 47,650 29,500 800 Print Done 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 $24 per Standard and $23 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 Johnston's managers set for Standard desks to earn a $43 profit per desk? Print Done Clear a
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