Lawton's Office Department manufactures computer desks in its Moosejaw, Saskatchewan, plant. The company uses activity based costing to allocate all manufacturing conversion costs (direct labour 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 $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of postmanufacturing activities, such as distribution, marketing, and customer service. The postmanufacturing costs were $26 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 Lawton's managers set for Standard desks to earn a $46 profit per desk? Budgeted Cost Cost Allocation Rate Activity Materials handling $ $ 0.90 of Activity Allocation Base 300,000 Number of parts 3,200,000 Direct labour hours 200,000 Number of painted desks Assembling 24.00 Painting 5.30 Lawton produced two styles of desks in March: the Standard desk and the Unpainted desk. Data for each follow: Total Total Direct Total Total Assembling Units Materials Number Direct Labour Product Produced Costs of Parts Hours Standard desk. 9,000 $ 6,900 104,000 128,000 21,000 38,000 Unpainted desk 4,000 1,000 Requirement 1.Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. (For activities with a zero balance, enter "0". Round your answers to the nearest whole dollar.) Standard Desk Unpainted Desk Direct materials Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference. are reported in the financial statements. Managers use for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting. However, these costs Requirement 4. What price should Owen's managers set for Standard desks to earn a Sales price per unit - standard desk