The following data are for the two products produced by Tadros Company.

	Product A		Product B
Direct materials	$	13 per unit	$	27 per unit
Direct labor hours		0.6 DLH per unit		1.6 DLH per unit
Machine hours		0.5 MH per unit		1.2 MH per unit
Batches		125 batches		250 batches
Volume		10,000 units		2,000 units
Engineering modifications		9 modifications		45 modifications
Number of customers		500 customers		400 customers
Market price	$	36 per unit	$	95 per unit

The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.

	Costs				Driver
Indirect manufacturing
Engineering support		$	25,500		Engineering modifications
Electricity			37,000		Machine hours
Setup costs			41,000		Batches
Nonmanufacturing
Customer service			70,000		Number of customers

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.)

1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours.Overhead AssignedActivity DriverPlantwide OH rateTotal Overhead CostUnits ProducedOH Cost per unitProduct AProduct BProduct AProduct B

1.2 What is the gross profit per unit?Product AProduct BMarket priceGross profit per unit2.1 How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate?Product AProduct BGross profit per unitUnits purchased per customerGross 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 AProduct BGross profit per customerCustomer service cost per customerProfit (loss) per customerIs the profit adequate?

3.1 Determine the manufacturing cost per unit of each product line using ABC.Engineering SupportElectricitySetupOverhead AssignedActivity DriverActivity rateTotal Overhead CostProduct AEngineering supportElectricitySetupProduct BEngineering supportElectricitySetupTotal manufacturing costsProduct AProduct BDirect Materials per unitDirect Labor per unitOverhead per unitTotal manufacturing cost per unit

3.2 What is the gross profit per unit?Product AProduct BMarket price(29.29)(89.29)

4.1 How much gross profit is generated by each customer of Product A and Product B using ABC?Product AProduct BUnits purchased per customerGross profit (loss) per customer

4.2 Is the gross profit adequate for each customer of Product A and B using ABC?Product AProduct BGross profit (loss) per customerCustomer service cost per customerProfit (loss) per customerIs the profit adequate using ABC?

5.

Which method of product costing gives better information to managers of this company?

	Plantwide overhead rate method
	Departmental overhead rate method
	Activity-based costing method