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The following data are for the two products produced by Shakti Company. Direct materials Direct labor hours Machine hours Batches Volume Engineering modifications Number of
The following data are for the two products produced by Shakti Company. Direct materials Direct labor hours Machine hours Batches Volume Engineering modifications Number of customers Market price Product A Product B Product B $17 per unit $26 per unit 0.3 DLH per 1.6 DLH per unit unit 0.1 MH per unit 1.2 MH per unit 125 batches 225 batches 18,000 units 2,500 units 70 modifications modifications 1,200 customers 500 customers $35 per unit $135 per unit 22 The company's direct labor rate is $28 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing Engineering support Electricity Setup costs Nonmanufacturing Customer service $ 25,300 Engineering modifications 48,000 Machine hours 95,900 Batches 144,500 Number of customers Required: 1.1 Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. 1.2 What is the gross profit per unit? 2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate? 2.2 What is the cost of providing customer service to each customer? Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? 3.1 Determine the manufacturing cost per unit of each product line using ABC. 3.2 What is the gross profit per unit? 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? 4.2 Is the gross profit adequate for each customer of Product A and B using ABC? 5. Which method of product costing gives better information to managers of this company? Complete this question by entering your answers in the tabs below. Required Required Required Required Required 1.1 Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. 1.2 What is the gross profit per unit? (Losses per unit and losses per customer should be indicated with a minus sign. Round your intermediate calculations and round OH rate and cost per unit answers to 2 decimal places.) Show less 1.1 Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Overhead Assigned Activity Plantwide OH Driver rate Total Overhead Cost Units Produced OH Cost per unit Product A Product B Product Product B 1.2 What is the gross profit per unit? Product Market price Product B Gross profit per unit 2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate? 2.2 What is the cost of providing customer service to each customer? Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? (Losses per unit and losses per customer should be indicated with a minus sign. Round your intermediate calculations and round OH rate and cost per unit answers to 2 decimal places.) Show less 2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate? Product A Product B Gross profit per unit Units purchased per customer Gross profit per customer 2.2 What is the cost of providing customer service to each customer? Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product Product B Gross profit per customer Customer service cost per customer Profit (loss) per customer Is the profit adequate? 3.1 Determine the manufacturing cost per unit of each product line using ABC. 3.2 What is the gross profit per unit? (Losses per unit and losses per customer should be indicated with a minus sign. Round your intermediate calculations and round OH rate and cost per unit answers to 2 decimal places.) Show less 3.1 Determine the manufacturing cost per unit of each product line using ABC. Engineering Support Electricity Setup Overhead Assigned Activity Driver Activity rate Total Overhead Cost Product A Engineering Support Electricity per modification per machine hour per batch Setup Product B Engineering Support Electricity Setup Product Product B Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per unit 3.2 What is the gross profit per unit? Product Market price Product B 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? 4.2 Is the gross profit adequate for each customer of Product A and B using ABC? (Losses per unit and losses per customer should be indicated with a minus sign. Round your intermediate calculations and round OH rate and cost per unit answers to 2 decimal places.) Show less 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product Product B Gross profit(loss) per unit Units purchased per customer Gross profit (loss) per customer 4.2 Is the gross profit adequate for each customer of Product A and B using ABC? Product B Gross profit (loss) per customer Service cost per customer Gross profit (loss) per customer Is the profit adequate using ABC? Which method of product costing gives better information to managers of this company? Which method of product costing gives better information to managers of this company
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