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Munoz Sporting Goods Corporatlion makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the
Munoz Sporting Goods Corporatlion makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are qulte different. The company has recently converted Its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Munoz made 71,500 tennis racquets and 29,600 badminton racquets) Badminton Racquet (BR) Direct Cost Tennis Racquet (TR) Direct $19.60 per unit $14.40 per unit materials Direct labor 33.50 per unit 24.70 per unit Category Estimated Cost Amount of Cost Driver Cost Driver Number of inspection hours TR: 15,600 hours; BR: 11,400 hours $ 783,000 Unit level Number of setups TR: 84 setups; BR 39 setups TR 4; BR: 1 TR: 31,000 hours; BR: 30, 000 hours Batch level 332,100 145,000 Product level Number of TV commercials Number of machine hours 488,000 Facility level $1,748,100 Total Inspectors are pald according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are pald monthly salarles. TV commercial fees are pald at the beginning of the quarter. Facility-level cost Includes depreclation of all productlon equipment. Required a. Compute the cost per unit for each product. b. If management wants to price badminton racquets 30 percent above cost, what price should the company set? Complete this question by entering your answers in the tabs below. Required A Required B Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.) Type of ProductCost per Unit Tennis Racquet Badminton Racquet Required A Required B
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