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

	Product A		Product B
Direct materials	$	14 per unit	$	26 per unit
Direct labor hours		0.5 DLH per unit		1.5 DLH per unit
Machine hours		0.4 MH per unit		1.1 MH per unit
Batches		100 batches		200 batches
Volume		10,000 units		2,000 units
Engineering modifications		9 modifications		45 modifications
Number of customers		500 customers		400 customers
Market price	$	34 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		$	26,500		Engineering modifications
Electricity			24,800		Machine hours
Setup costs			42,000		Batches
Nonmanufacturing
Customer service			72,000		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 costs	$93,300	$11.66	per direct labor hour
Direct labor hours	8,000
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Product A	5,000	$11.66	$58,300	10,000	$5.83
Product B	3,000	$11.66	$34,980	2,000	$17.49
Total manufacturing cost per unit:		Product A	Product B
Direct material cost per unit		$14.00	$26.00
Direct labor cost per unit		0.50	1.50
Overhead cost per unit		5.83	17.49
Total manufacturing cost		$20.33	$44.99
1.2 What is the gross profit per unit?
		Product A	Product B
Market price		$34.00	$95.00
Manufacturing cost per unit		(20.33)	(44.99)
Gross profit per unit		$13.67	$50.01
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		$13.67	$50.01
Units purchased per customer		20	5
Gross profit per customer		$273.40	$250.05
2.2 What is the cost of providing customer service to each customer?
Customer service costs	$72,000	$80.00	per customer
Number of customers	900
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		$273.40	$250.05
Customer service cost per customer		80.00	80.00
Profit (loss) per customer		$193.40	$170.05
Is the profit adequate?		Yes	Yes
3.1 Determine the manufacturing cost per unit of each product line using ABC.
Engineering Support
Inspection hours	$26,500	$490.74
Number of modifications	54
Electricity
Overhead costs	$24,800	$4.00
Number of machine hours	6,200
Setup
Overhead costs	$42,000	$140.00
Number of batches	300
Overhead Assigned	Activity Driver		Activity rate		Total Overhead Cost
Product A
Engineering support	9	modifications	$490.74	per modification	$4,417
Electricity	4,000	machine hours	$4.00	per machine hour	16,000
Setup			$140.00	per batch
					$0
Product B
Engineering support
Electricity
Setup
					$0
Total manufacturing costs		Product A	Product B
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
		(27.44)	(85.44)
4.1 How much gross profit is generated by each customer of Product A and Product B using ABC?
		Product A	Product B
0
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?