McKnight 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.) 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 Standard Desk Unpainted Desk 51000 186000 5900 186000 Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $4 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $19 per Unpainted desk. Compute the full product costs per desk. 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 Requirement 4. What price should McKnight's managers set for Standard desks to earn a $37 profit per desk? Sales price per unit - standard desk Choose from any list or enter any number in the input fields and then continue to the next question. Requirements that are expensed as incurred for external reporting. However, these costs often are Data Table 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 $4 each. Similar analyses were conducted of post-manufacturing activities, such as distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $19 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 McKnight's managers set for Standard desks to earn a $37 profit per desk? Activity Budgeted Cost of Activity Allocation Base Cost Allocation Rate Materials handling Assembling $ 310,000 Number of parts S 0.60 $ Painting S 2,600,000 Direct labor hours 180,000 Number of painted desks S 17.00 $ 5.00 McKnight produced two styles of desks in March: the Standard desk and Unpainted desk. Data for each follow: Product Total Units Produced Standard desk..... 5,500 $ Unpainted desk .... 1.500 Total Direct Materials Costs 51,000 5,900 Total Number of Parts Total Assembling Direct Labor Hours 121,500 6,300 31,500 1,100 Print Done Print Done