nemnical Company produces three products. The operating results of the current year are: Product Sales Quantity 1.450.00 7.250.00 725.00 Tammet Price $293.00 305.60 210.50 Actual Price $294.00 263.60 318.00 Difference $ 1.00 (42.00) $ 107.50 e firm sets the target price of each product at 150% of the product's total manufacturing cost. It appears that the roduct Cat a much higher price than the target price of the product and lost money on Product B. Tom Watson, romote Product C much more aggressively and phase out Product B. He believes that the information suggests Catest potential among the firm's three products because the actual selling price of Product C was almost 50% rice, while the firm was forced to sell Product B at a price below the target price. Both the budgeted and actual factory overhead for the current year are $688,800. The actual units sold for each -ame as the budgeted units. The firm uses direct labor dollars to assign manufacturing overhead costs. The direc abor costs per unit for each product are: Direct materials Direct labor Total prime cost Product A $ 58.00 28.00 $ 86.00 Product B $ 122.40 20.00 $ 142.40 Product C $ 73.00 14.50 $ 87.50 The controller noticed that not all products consumed factory overhead similarly. Upon further investigation, she id usage of factory overhead during the year. Product A Product B 5 Product C 6 358 408 258 53 33 Number of setups Weight of direct materials (pounds) Waste and hazardous disposals Quality inspections Utilities (machine hours) Total Total Overhead $ 9,800 159,500 362,500 83,000 74.000 $ 688,800 38 2,900 7,800 1,450 Required: 1 Determine the manufacturing cost per unit for each of the products per unit for each of the products using the volume-based method in the What is the least profitable and the most profitable product under both the 3. What is the new target price for each product based on 150% of the new actual selling price. ofitable product under both the current and the ABC systems? st based on 150% of the new costs under the ABC system? Compare What is the new target price for each product based on 150% of the new costs under the ABC system? Compar with the actual selling price. (Round your intermediate calculations and final answers to 2 decimal places.) Product A Product B Product C $ 60 $ Product costs: Activity system ABC-based product pricing: Target price Actual selling price Difference in price $ $ 21 50 294.00 20 263.60 30 318.00 40.00 $ $ Required 2 Required 3 >
