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P24-25A Lawton, Inc., manufactures bookcases and uses an activity-based costing system. Lawton's activity areas and related data follow. Budgeted Cost Cost Allocation Base Allocation Rate
P24-25A Lawton, Inc., manufactures bookcases and uses an activity-based costing system. Lawton's activity areas and related data follow. Budgeted Cost Cost Allocation Base Allocation Rate 0.80 15.00 3.90 Activit Materials handling Assembling Finishing of Activity 200,000 Number of parts 3,000,000 Direc labor hours 160,000 Number of finished units Lawton produced two styles of bookcases in April: the standard bookcase and an unfinished bookcase, which has fewer parts and requires no finishing. The totals for quantities, direct materials costs, and other data follow Tota Total Total Direct Assembling Units Materials Number Direct Labor Product Produced Costs of Parts Hours Standard bookcase 3,000 $29,300 80,000 3,000 2,000 Unfinished bookcase 3,600 28,800 84,000 Requirements 1. Compute the manufacturing product cost per unit of each type of bookcase. (pp. 1209, 1210) . Suppose that premanufacturing activities, such as product design, were assigned to the standard bookcases at $4 each and to the unfin- ished bookcases at $3 each. Similar analyses were conducted of post- manufacturing activities such as distribution, marketing, and cus- tomer service. The postmanufacturing costs were $20 per standard bookcase and $15 per unfinished bookease. Compute the full prod- uct costs per unit. (p. 1213) 3. Which product costs ace reported in the external financial state ments? Which costs are used for management decision making? Explain the difference. . What price should Lawton's managers set for unfinished bookcases to earn a unit profit of $16 (p. 1210
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