Swenson Company manufactures 4,000 units of Deluxe Product and 20,000 units of Regular Product each year. The company currently uses direct labor-hours to assign overhead cost to products. Data per unit is: Direct materials /unit Direct labor /unit DLH /unit Activity Machine setups Quality Inspections Production orders. Machine-hours worked Material receipts Total Suppose, however, that factory overhead costs are actually caused by the five activities listed below: Activity Machine setups Quality inspections Production orders Machine-hours worked Material receipts Additional data is: Product Sales Quantity Target Price Actual Price capital invested ROI Also suppose the following transaction data has been collected: Deluxe $40.00 $20.00 H2.500 Required 1. 2. 4. 33,000 800 Regular $30.00 $15.00 H2.000 Deluxe 4,000 278.00 Number of Transactions Total Deluxe Regular 5,000 3,000 2,000 8,000 5,000 3,000 600 200 400 $270.00 720,000 16% Costs $300,000 200,000 90,000 330,000 80,000 $1,000,000 10,000 200 23,000 600 Determine the Manufacturing Cost per unit for each of the two products under both the current (VBC) and the ABC costing systems. What is the most (least) profitable product under both the current (VBC) and the ABC costing systems (use gross profit margin ratio-%- as indicator)? Comment on your results. 3. If the firm sets the target price of each product at mark-up % of the product's total manufacturing cost. What is the mark-up % for each product based upon the target price above? From the above data, calculate sales margin ratio (%) and invested capital turnover for each product. Regular 20,000 115.60 $116.00 1,160,000 15%

Swenson Company manufachures 4,000 units of Deluxe Product and 20,000 units of Regalar Product cach year. The company currently uses direct labor-hours to assign overhead cost to products. Data per unit is: Suppose, however, that factory overhead costs are achally cunsed by the five activities listed below: Also suppose the following transaction dita has been collected: Reaticed 1. Decermine the Manufacturing Cost per unit for each of the two products under both the current (VBC) and the ABC costing systems. 2. What is the most (leasi) profitable prodoct under bodh the corrent (VBC ) and the ABC costing systems (use gross profit margin ratio-is as indicator)? Comment on your fesults. 3. If the firm sets the target price of each product at mark-ap %5 of the product's fotal mamufacturing cost. What is the mark-up \% for cach product based upce the luggot price abowe? 4. From the above dass, calculate sales margin titio (Y6) and invested capilal tumover for each product