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The following data are for the two products produced by Tadros Company. Product A Product B Direct materials $ 15 per unit $ 26 per
The following data are for the two products produced by Tadros Company.
Product A | Product B | ||||
Direct materials | $ | 15 per unit | $ | 26 per unit | |
Direct labor hours | 0.4 DLH per unit | 1.4 DLH per unit | |||
Machine hours | 0.3 MH per unit | 1.0 MH per unit | |||
Batches | 125 batches | 250 batches | |||
Volume | 10,000 units | 2,000 units | |||
Engineering modifications | 10 modifications | 50 modifications | |||
Number of customers | 500 customers | 400 customers | |||
Market price | $ | 35 per unit | $ | 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 | $ | 25,000 | Engineering modifications | |
Electricity | 20,000 | Machine hours | ||
Setup costs | 43,000 | Batches | ||
Nonmanufacturing | ||||
Customer service | 74,000 | 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.)
this is all the information provided!
1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Overhead costs $ 88,000 0 per direct labor hour Direct labor hours Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit 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? 0 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 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 0 Electricity 01 Setup 0 erhead Assigned Activity Driver Activity rate Total Overhead Cost Product A Engineering support Electricity Setup Product B Engineering support Electricity Setup S 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 (26.05) (82.75) 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 informationStep by Step Solution
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