Problem C-2A Pricing analysis with ABC and a plantwide overhead rate A1 P1 P2 Tent Master produces two lines of tents sold to outdoor enthusiasts in department A. In department B the tents are sewn and folded. The sociated with these two manufacturing processes and the company's The tents are cut to specifications activities, costs, and drivers as- production support activities follow activities. c production support Process Activity Pattern alignment Cutting Moving product Overhead Cost Driver 560 12.300 2.400 Department A $ 64,400 50.430 Machine hours 100.800 Moves 5215.630 $327,600 24,000 47.880 399480 Department B Sewing Direct labor hours Inspections Units 600 22.800 280 Design Providing space Materials handling $280,000 Modification orders 51,600 Square feet 184000 gare yards 920,000 $515,600 Additional production information on the two lines of tents follows. Pup Tent Pop-up Tent Units produced Moves Batches Number of inspections Machine hours 15,200 units 800 moves 140 batches 240 inspections 7,000 MH 2,600 DLH 70 modification orders 7.600 units 1,600 moves 420 batches 360 inspections 5.300 MH 1.600 DLH 210 modification orders 4,300 square feet 70.000 square yards Modfication orders Space occupied Material required 4,300 square feet 450.000 square yards 4 Required 1. Using a plantwide overhead rate based on direct labor hours, compute the overhead cost that is as- 2. Using the plantwide overhead rate, determine the total cost per unit for the two products if the direct 3. If the market price of the pup tent is S65 and the market price of the pop-up tent is $200, determine the 4. Using ABC, compute the total cost per unit for each tent if the direct labor and direct materials cost is 5. If the market price is $65 per pup tent and $200 per pop-up tent, determine the gross profit per unit for 6. Would your pricing analysis be improved if the company used, instead of ABC, departmental signed to each pup tent and each pop-up tent. materials and direct labor cost is $25 per pup tent and $32 per pop-up tent. gross profit per unit for each tent. What might management conclude about the pup tent? S25 per pup tent and $32 per pop-up tent. each tent. Comment on the results. determined using machine hours in department A and direct labor hours Check 14) Pup tent $58.46 per unit cost in department B? Explain