The following data are for the two products produced by Tadros Company. Direct materials Direct labor hours Machine hours Batches Volume Engineering modifications Number of customers Market price Product A $13 per unit 0.3 DLH per unit 0.2 MH per unit 90 batches 10,000 units 9 modifications 500 customers $35 per unit Product B $25 per unit 1.5 DLH per unit 1.1 MH per unit 180 batches 2,000 units 45 modifications 400 customers $120 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing Engineering support Electricity Setup costs Nonmanufacturing Customer service $26,000 Engineering modifications 16,800 Machine hours 43,000 Batches 73,000 Number of customers Required: Round your per unit cost answers to 2 decimal places and other answers to nearest whole number. Loss amounts indicated with minus sign.) 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Overhead costs 85.800 $ 14.30 per direct labor hour y cusl por unit: Direct material cost per unit Direct labor cost per unit Overhead cost per unit Product A 13.00 $ s Product B 25.00 30.00 6.00 4.29 21.45 Total manufacturing cost $ 23.29 S 76.45 1.2 What is the gross profit per unit? Product A Product B Market price $ 35.00 s 120.00 Manufacturing cost per unit (23.29) (76.45) Gross profit per unit $ 11.71 $ 43.55 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 s 11.71 $ 43.55 Units purchased per customer 20 5 Gross profit per customer $ 234.20 $ 217.75 2.2 What is the cost of providing customer service to each customer? Customer service costs $ 73.000 $ 81.11 per customer Number of customers 900 Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product A Product B Gross profit per customer $ 234.20 $ 217.75 81.11 81.11 Customer service cost per customer $ 153.09 $ 136.64 Profit (loss) per customer Vae Noe le the nnfit Arensinta? FR Next Engineering Support Overhead costs $ 26.000 $ 481.48 per modification Number of modifications 54 Electricity Overhead costs $ 16,800 $ 4.00 per machine hour Number of machine hours 4,200 Setup Overhead costs Number of batches $ 159.26 per batch 43,000 $ 270 Overhead Assigned Activity Driver Total Overh Cost Activity rate 9 modifications $ 35.00 per modification Product A Engineering support Electricity Setup $ $ 35.00 per modification 45 modifications $ Product B Engineering support Electricity Setup $ Product A 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 A Product B Market price (21.67) (84.57) 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product A Product B 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 A Product B Gross profit (loss) per customer Customer service cost per customer Profit (loss) per customer Is the profit adequate using ABC? 5. Which method of product costing gives better information to managers of this company? Method of product costing for better information
