Problem 17-1A Comparing costs using ABC with the plantwide overhead rate LO P1, P3, A1, A2 The following data are for the two products produced by Tadros Company. Direct materials Direct labor hours Machine hours Batches Volume Number of customers Engineering modifications Market price Product A $15 per unit 0.5 DLH per unit 0.4 MH per unit 200 batches 16,000 units 14 modifications 800 customers $55 per unit Product B $30 per unit 1.5 DLH per unit 1.2 MH per unit 360 batches 3,600 units 86 modifications 720 customers $220 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Indirect manufacturing Driver Engineering modifications Costs Engineering support $ 53,600 Electricity 42,880 Machine hours Setup costs 171,520 Batches Nonmanufacturing Customer service 136,800 Number of customers Required: (Round your per unit cost answers to 2 decimal places and other answers to nearest whole number. Loss amounts should be indicated with minus sign.) 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Overhead costs Direct labor costs Overhead Assigned Product A Product B $ 268,000 $ 20.00 per direct labor hour 13,400 Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit 8,000 $ 20.00 $ 5,400 $ 20.00 $ 160,000 108,000 16,000 $ 10.00 3,600 $ 30.00 Total manufacturing cost per unit: Direct material cost per unit Direct labor cost per unit Overhead cost per unit Total manufacturing cost 1.2 What is the gross profit per unit? Product A Product B 15.00 $ 30.00 10.00 30.00 10.00 30.00 $ 35.00 $ 90.00 Market price Manufacturing cost per unit Gross profit per unit Product A Product B 55.00 $ 220.00 (90.00) (35.00) 20.00 $ 130.00 2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate? Gross profit per unit Units purchased per customer Gross profit per customer Product A Product B $ 20.00 $ 130.00 20 5 $ 400.00 $ 650.00 2.2 What is the cost of providing customer service to each customer? Customer service costs Number of customers $ 136,800 $ 1,520 90.00 per customer Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product A Product B Gross profit per customer $ 400.00 $ 650.00 Customer service cost per customer 90.00 90.00 Profit (loss) per customer $ 310.00 560.00 Is the profit adequate? Yes Yes