Question
Prescott Corp. manufactures computer desks in its Boston, Massachusetts, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing
Prescott Corp. manufactures computer desks in its Boston, Massachusetts, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow.
Requirement 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. (Complete all input boxes. Enter a "0" for any zero amounts. Round your answers to the nearest whole dollar.)
| Standard Desk | Unpainted Desk |
Direct materials |
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Materials handling |
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Assembling |
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Painting |
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Total manufacturing cost |
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Number of units |
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Manufacturing cost per unit |
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Kindly answer all the requirements.
P4-42A (similar to) 18 Question Help 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 $2 each. Similar analyses were conducted of post-manufacturing activities, such as distribution, marketing, and customer service. The post-manufacturing costs were $24 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 Prescott's managers set for Standard desks to earn a $43 profit per desk? Budgeted Cost Cost Activity of Activity Allocation Base Allocation Rate Materials handling $ 310,000 Number of parts 0.90 Assembling 2,600,000 Direct labor hours 17.00 Painting 180,000 Number of painted desks $ 4.80 Prescott produced two styles of desks in March: the Standard desk and Unpainted desk. Data for each follow: $ Print Done Prescott produced two styles of desks in March: the Standard desk and Unpainted desk. Data for each follow: Total Total Direct Total Total Assembling Units Materials Number Direct Labor Product Produced Costs of Parts Hours Standard desk 5,000 $ 39,300 120,000 6,100 Unpainted desk 3,000 $ 49,800 30,000 600 Print DoneStep by Step Solution
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