Solomon Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Solomon made 72,000 tennis racquets and 29,400 badminton racquets). Direct Cost Direct materials Direct labor Tennis Racquet (TR) $15.60 per unit 33.50 per unit Badminton Racquet (BR) $14.30 per unit 26.50 per unit Category Unit level Batch level Product level Facility level Total Estimated cost $ 682,000 254,100 145,000 610,000 $1,691, 100 Cost Driver Number of inspection hours Number of setups Number of TV commercials Number of machine hours Amount of Cost Driver TR: 15,400 hours; BR: 6,600 hours TR: 81 setups; BR: 40 setups TR: 4; BR: 1 TR: 30,600 hours; BR: 30,400 hours Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment Required 1. Compute the cost per unit for each product. 5. If management wants to price badminton racquets 30 percent above cost, what price should the company set? Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment. Required a. Compute the cost per unit for each product. b. If management wants to price badminton racquets 30 percent above cost, what price should the company set? Complete this question by entering your answers in the tabs below. Required A Required B Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.) Type of Product Cost per Unit Tennis Racquet Badminton Racquet FA Required B > Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment Required a. Compute the cost per unit for each product. b. If management wants to price badminton racquets 30 percent above cost, what price should the company set? Complete this question by entering your answers in the tabs below. Required A Required B If management wants to price badminton racquets 30 percent above cost, what price should the company set? (Round intermediate calculations and final answer to 2 decimal places.) Price of badminton racquets
