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Jordan Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Jordan uses an activity-based costing
Jordan Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Jordan uses an activity-based costing system. The following are the relevant cost data for the previous month: Direct Cost per Unit Direct materials Direct labor Model ZM $20.80 29.60 Model DS $10.80 13.60 Category Unit level Batch level Product level Facility level Total $ 24,000 Estimated Cost Cost Driver 48,500 Number of units Number of setups 87,500 Number of TV commercials Number of machine hours 270,000 $430,000 Use of Cost Driver ZM: 2,500 units; DS: 9,500 units ZM: 25 setups; DS: 25 setups ZM: 14; DS: 11 ZM: 500 hours; DS: 1,000 hours Jordan's facility has the capacity to operate 4,500 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $130 and for DS is $83. If Jordan sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert believes that Jordan can sell as many cameras as it can produce by pricing Model ZM at $125 and Model DS at $46. Jordan would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.) Type of Product Model ZM Model DS Direct Materials + + Direct Labor ++ Allocated Overhead Total = $ 0.00 = 0.00 Complete this question by entering your answers in the tabs below. Required A Required B Required C The current market price for products comparable to Model ZM is $130 and for DS is $83. If Jordan sold all of its products at the market prices, what was its profit or loss for the previous month? (Round intermediate calculations to 2 decimal places. Loss amounts should be indicated by a minus sign.) Model ZM Model DS Amount Complete this question by entering your answers in the tabs below. Required A Required B Required C A market expert believes that Jordan can sell as many cameras as it can produce by pricing Model ZM at $125 and Model DS at $46. Jordan would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? (Round your answers to 2 decimal places.) Target cost/unit Model ZM Model DS
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