Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 $20 per unit 0.5 DLH per unit 0.4 MH per unit 200 batches 16,000 units 18 modifications 800 customers $55 per unit Product B $25 per unit 1.5 DLH per unit 1.2 MH per unit 360 batches 3,600 units 82 modifications 720 customers $220 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing Engineering support $ 53,600 Engineering modifications Electricity 42,880 Machine hours Setup costs 171,520 Batches Nonmanufacturing Customer service 129,200 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 costs $ 268,000 $ 20.00 per direct labor hour Direct labor hours 13,400 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Prev 1 of 1 Next Product A Product B $ 20.00 $ 25.00 Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit 5.00 15.00 6.02 47.62 Total manufacturing cost per unit $ 31.02 $ 87.62 3.2 What is the gross profit per unit? Product A Product B Market price (36.03) (102.64) 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started