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The following data are for the two products produced by Shakti Company. Direct materials Direct labor hours Machine hours Batches Product A $25 per
The following data are for the two products produced by Shakti Company. Direct materials Direct labor hours Machine hours Batches Product A $25 per unit 0.2 DLH per unit 0.1 MH per unit 130 batches. Product B $34 per unit 1.4 DLH per unit 1.2 MH per unit 230 batches. EFF Volume 15,000 units 19 modifications Engineering modifications Number of customers 1,000 customers Market price $40 per unit 3,000 units 68 modifications 500 customers. $135 per unit The company's direct labor rate is $29 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing Engineering support Electricity Setup costs Nonmanufacturing Customer service $ 26,100 Engineering modifications 45,900 Machine hours 108,000 Batches 105,000 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? 41 How much arnce profit is nonerated by each customer of Product A and Product Rucing ABC?
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