The following data are for the two products produced by Tadros Company
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 $15 per unit 0.3 DLH per unit 0.1 MH per unit 125 batches 10,000 units 12 modifications 500 customers $30 per unit Product B $24 per unit 1.6 DLH per unit 1.2 MH per unit 225 batches 2,000 units 58 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 $24,500 Engineering modifications 34,000 Machine hours 52,500 Batches 81,000 Number of customers Required: (Loss amounts should be indicated with minus sign. Round your per unit cost answers to 2 decimal places.) 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Overhead Assigned Product A Product B Product A Product B Product A Product B 1.2 What is the gross profit per unit? Product A Product B Market price 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? 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 A 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. Engineering Support 01 3.1 Determine the manufacturing cost per unit of each product line using ABC. Engineering Support 0 Electricity Setup 0 Overhead Assigned Activity Driver Activity rate Total Overhead Cost Product A Engineering support Electricity Setup $ 0 Product B Engineering support Electricity Setup $ 0 Product Product B Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit 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 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 Bright Day Company produces two beverages, Hi-Voltage and Easy Slim. Data about these products follow. Production volume Liquid materials Dry materials Bottles Labels Machine setups Machine hours Hi-Voltage 12,500 bottles 1,400 gallons 620 pounds 12,500 bottles 3 labels per bottle 500 setups 200 MH EasySlim 180,000 bottles 37,000 gallons 12,000 pounds 180,000 bottles 1 label per bottle 300 setups 3,750 MH Additional data from its two production departments follow. Driver Cost Department Mixing department Liquid materials Dry materials Utilities Bottling department Bottles Labeling Machine setup Gallons Pounds Machine hours $ 2,304 6,941 1,422 Units Labels per bottle Setups $77,000 6,525 20,000 Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? 3. If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of EasySlim? Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? 3. If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of Easy Slim? Complete this question by entering your answers in the tabs below. Req 1 to 2 Reg 3 Reg 4 Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? (Do not round your intermediate calculations. Round "Activity Rate" and "Average cost per bottle" answers to 2 decimal places.) Hi-Voltage Activity driver incurred Overhead assigned Easy Slim Activity driver incurred Expected Costs Expected Activity Activity Rate Overhead assigned Activity Mixing department Liquid materials Dry materials Utilities Bottling department Bottles Labeling Machine setup Gallons Pounds Machine hours Bottles Labels Setups Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? 3. If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of EasySlim? Complete this question by entering your answers in the tabs below. Req 1 to 2 Req3 Reg 4 If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? (Do not round intermediate calculations and round your final answers to 2 decimal places.) Hi-Voltage Price per unit Cost per unit Profit (loss) per unit Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? 3. If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of EasySlim? Complete this question by entering your answers in the tabs below. Req 1 to 2 Req3 Req 4 What is the minimum price that the company should set per bottle of Easy Slim? What is the minimum price that the company should set per bottle of Easy Slim? Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? 3. If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of EasySlim? Complete this question by entering your answers in the tabs below. Req 1 to 2 Req3 Reg 4 If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? (Do not round intermediate calculations and round your final answers to 2 decimal places.) Hi-Voltage Price per unit Cost per unit Profit (loss) per unit Required: 1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and Easy Slim? 3. If Hi-Voltage sells for $3.75 per bottle, how much profit does the company earn per bottle of Hi-Voltage that it sells? 4. What is the minimum price that the company should set per bottle of EasySlim? Complete this question by entering your answers in the tabs below. Req 1 to 2 Req3 Req 4 What is the minimum price that the company should set per bottle of Easy Slim? What is the minimum price that the company should set per bottle of Easy Slim?
