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Requirements McKnight Corp. Manufactures computer desks in its Nashville, Tennessee, plant. The company uses activity-based costing to allocate al manufacturing con Click the icon to view the activity areas and related data) Read the 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 $7 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 $21 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 S41 profit per desk? Requirement 1. Compute the per unit manufacturing product cost of Standard desks and Unpainted desks. (Complete all input fieltis. Enter a "O" for any zer Unpainted Desk 39450 Standard Desk 8750 107550 91200 245001 26550 Direct materials Materials handling Assembling Painting Total manufacturing cost Number of units 16000 a2000 230000 5000 Print Done 2000 46 41 Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $7 isach 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 $21 par Standard and $19 per Unpainted desk Compute the full product costs per desk Standard Desk 46|| Unpainted Desk 41 Full product cost per unit Requirement 3. Which product costs are reported in the extemal financial statements? Which costs are used for management decision making? Explain the difference Full product costs are reported in the financial statements. Managers use manufacturing product costs for decisions such as pricing and product emphasis. Full product costs include the costs of premanufacturing and post-manufacturing activilies that are expensed as incurred for external reporting. However, these costs often are assigned to products for internal decisions 1 Requirement 4. What price should McKnight's managers set for Standard desks to earn a $41 prafit per desk? McKnight Corp. manufactures computer desks in its Nashville, Tennessee, plant. The company uses activity-based costing to allocate Click the icon to view the activity areas and related data) Read the requirements Budgeted Cost Cost Allocation Activity of Activity Allocation Base Rate Materials handling ...S 330.000 Number of parts $ 0.90 Assembling ........S 2,600,000 Direct labor hours $ 16.00 Painting ............S 160.000 Number of painted desks $ 4.90 McKnight produced two styles of deske in March: the Standard cesk and Unpainted dook. Data for each follow: 107550 26550 91200 16000 Materials handling Assembling Painting Total manufacturing cost Number of units 246001 a2000 Product 230000 5000 Total Units Total Direct Produced Materials Costs 5,000 S 8.750 2.000 S 39 450 Total Number Total Assembling of Parts Direct Labor Hours 119.500 5.700 29,500 1.000 Standard desk ... Unpainted desk ... 2000 Manufacturing cost per unit 46 A, and customer Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $7 each and to the Unpa service. The post-manufacturing costs were $21 par Standard and $19 per Unpainted desk. Compute the full product costs per desk Print Done Standard Desk 46 Unpainted Desk 41 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 Full product costs are reported in the financial statemenls. Managers use manufacturing produce costs for decisions such as pricing and product emphasis. Full product coels include the cost of premanufacturing and posl-manufacluring aclivilies that are expensed as incurred for external reporting. However, these costs often are assigned to products for internal decisions Requirement 4. What price should McKnight's managers set for Standard desks to sam a $41 profit per desk? Manufacturing cost per unit Manufacturing cost per unit Sales price per unit - standard desk
