Requirements 1. Compute the manufacturing product cost per unit of each type of bookcase. 2. Suppose that pre-manufacturing activities, such as product design, were assigned to the standard bookcases at $4 each and to the unfinished bookcases at $2 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $23 per standard bookcase and $15 per unfinished bookcase. Compute the full product costs per unit. 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 McKnight's managers set for unfinished bookcases to earn a net profit of $16 per bookcase? Predetermined Budgeted Cost of Overhead Activity Activity Allocation Base Allocation Rate Materials handling $ 210,000 Number of parts $ 1.00 Assembly 3,400,000 Number of assembling direct labor hours 12.00 Finishing 160,000 Number of finished units 2.50 *Refers to number of units receiving the finishing activity, not the number of units transferred to Finished Goods Inventory Product Total Units Produced 6,000 Total Direct Total Direct Total Number Materials Costs Labor Costs of Parts $ 90,000 $ 135,000 24,000 91,000 97,500 19,500 Total Assembling Direct Labor Hours 9,000 6,500 Standard bookcase Unfinished bookcase 6,500