Question
The following data are for the two products produced by Tadros Company. Product A Product B Direct materials $ 14 per unit $ 24 per
The following data are for the two products produced by Tadros Company. |
| Product A | Product B | ||
Direct materials | $ | 14 per unit | $ | 24 per unit |
Direct labor hours |
| 0.5 DLH per unit |
| 1.5 DLH per unit |
Machine hours |
| 0.4 MH per unit |
| 1.1 MH per unit |
Batches |
| 100 batches |
| 200 batches |
Volume |
| 10,000 units |
| 2,000 units |
Engineering modifications |
| 8 modifications |
| 40 modifications |
Number of customers |
| 500 customers |
| 400 customers |
Market price | $ | 35 per unit | $ | 95 per unit |
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The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. |
| Costs | Driver | |||
Indirect manufacturing |
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Engineering support |
| $ | 26,500 |
| Engineering modifications |
Electricity |
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| 31,000 |
| Machine hours |
Setup costs |
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| 42,000 |
| Batches |
Nonmanufacturing |
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Customer service |
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| 71,000 |
| Number of customers |
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Required: (Round your per unit cost answers to 2 decimal places and other answers to nearest whole number. Loss amounts should be indicated with minus sign.) |
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5. | Which method of product costing gives better information to managers of this company? | ||||||
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