Question
Klein Company produces three types of bird feeders: Basic, Squirrel-Proof, and Deluxe. Currently, the company allocates overhead to products using machine-hours. This year, the company
Klein Company produces three types of bird feeders: Basic, Squirrel-Proof, and Deluxe. Currently, the company allocates overhead to products using machine-hours. This year, the company produced 1,000 Basic models, 2,000 Squirrel-Proof models, and 1,800 Deluxe models. Details for each product at the end of the current year are as follows:
Basic | Squirrel-Proof | Deluxe | |||||||
Revenue | $ | 30,000 | $ | 110,000 | $ | 117,000 | |||
Direct materials | $ | 12,000 | $ | 50,000 | $ | 54,000 | |||
Direct labour | $ | 7,500 | $ | 19,000 | $ | 22,500 | |||
Machine-hours per unit | 0.3 | MH | 0.5 | MH | 0.4 | MH | |||
The total overhead cost to be allocated to products is $28,000.
Required:
1. Calculate the profit per unit for each product after allocated overhead costs using machine-hours. (Round your intermediate and final answers to 2 decimal places.)
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