Lawton Corp. manufactures computer desks in its Pheonix, Arizona, 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.) 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 $25 per Standard and $22 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 Lawton's managers set for Standard desks to earn a $45 profit per desk? Budgeted Cost Cost Activity of Activity Allocation Base Allocation Rate Materials handling . 320,000 Number of parts 0.80 Assembling 2,700,000 Direct labor hours 14.00 Painting 140,000 Number of painted desks $ 5.10 Lawton produced two styles of desks in March: the Standard desk and Unpainted desk. Data for each follow: Total Total Direct Total Total Assembling Units Materials Number Direct Labor Product Produced Costs of Parts Hours Standard desk. 7,500 112,550 119,000 6,000 $ $ Unpainted desk 2,000 40,200 29,000 900