Question Comparing costs using ABC with the plantwide overhead rate The following data are for the two products produced by Tadros Company Product A Product B Direct Materials $15 per unit $24 per unit Direct Labor Hours 0 3 DLH per unit 1 6 DLH per unit Machine Hours 0 1 MH per unit 1 2 MH per unit Batches 125 batches 225 batches Volume 10,000 units 2,000 units Engineering modifications 12 modifications 58 modifications Number of customers 500 customers 400 customers Market price $30 per unit $120 per unit The company's direct labor rate is $20 per direct labor hour (DLH) Additional information follows Costs Driver Indirect manufacturing Engineering support $24,000 Engineering modifications Electricity 34,000 Machine hours Setup costs 52,500 Batches Nonmanufacturing Customer service 81,000 Number of customers Help Find the computation for the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours What is the gross profit per unit How much gross profit is generated by each customer of Product A using the plantwide overhead rate How much gross profit is generated by each customer of Product B using the plantwide overhead rate What is the cost of providing customer service to each customer What information is provided by this comparison Determine the manufacturing cost per unit of each product line using ABC What is the gross profit per unit How much gross profit is generated by each customer of Product A using ABC How much gross profit is generated by each customer of Product B using ABC Is the gross profit per customer adequate Which method of product costing gives better information to managers of this company Explain why Comment

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Posted on Jun 23, 2024

Question:Comparing costs using ABC with the plantwide overhead rate.

The following data are for the two products produced by Tadros Company.

Product A Product B

Direct Materials $15 per unit $24 per unit

Direct Labor Hours 0.3 DLH per unit 1.6 DLH per unit

Machine Hours 0.1 MH per unit 1.2 MH per unit

Batches 125 batches 225 batches

Volume 10,000 units 2,000 units

Engineering modifications 12 modifications 58 modifications

Number of customers 500 customers 400 customers

Market price $30 per unit $120 per unit

The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.

Costs Driver

Indirect manufacturing

Engineering support $24,000 Engineering modifications

Electricity 34,000 Machine hours

Setup costs 52,500 Batches

Nonmanufacturing

Customer service 81,000 Number of customers

Help!!!

Find the computation for the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. What is the gross profit per unit?
How much gross profit is generated by each customer of Product A using the plantwide overhead rate? How much gross profit is generated by each customer of Product B using the plantwide overhead rate? What is the cost of providing customer service to each customer? What information is provided by this comparison?
Determine the manufacturing cost per unit of each product line using ABC. What is the gross profit per unit?
How much gross profit is generated by each customer of Product A using ABC? How much gross profit is generated by each customer of Product B using ABC? Is the gross profit per customer adequate?
Which method of product costing gives better information to managers of this company? Explain why