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 0.5 DLH per unit 0.4 MH per unit 200 batches 16,000 units 18 modifications 600 customers $55 per unit Product B $30 per unit 1.5 DLH per unit 1.2 MH per unit 360 batches 3,600 units 82 modifications 500 customers $220 per unit The company's direct labor rate is $27 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing Engineering support Electricity Setup costs Nonmanufacturing Customer service $ 53,600 Engineering modifications 42,880 Machine hours 171,520 Batches 93,500 Number of customers 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 Units Produced rate Total Overhead Cost Product A 8,000 $ 20.00 160,000 16,000 Product B 5,400 $ 20.00 108,000 3,600 OH Cost per unit $ 10.00 $ 30.00 Product A $ 15.00 Total manufacturing cost per unit: Direct material cost per unit Direct labor cost per unit Overhead cost per unit Total manufacturing cost Product B 30.00 40.50 30.00 13.50 10.00 $ 38.50 $ 100.50 1.2 What is the gross profit per unit? $ Market price Manufacturing cost per unit Gross profit per unit Product A 55.00 (38.50) 16.50 Product B 220.00 (100.50) 119.50 $ 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 16.50 $ 119.50 Units purchased per customer 27 7% Gross profit per customer $ 440.00 860.00 2.2 What is the cost of providing customer service to each customer? Customer service costs $ 93,500 $ 85.00 per customer Number of customers 1,100 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 $ 440.00 860.00 Customer service cost per customer 85.00 85.00 Profit (loss) per customer $ 355.00 $ 775.40 Is the profit adequate? Yes Yes 3.1 Determine the manufacturing cost per unit of each product line using ABC. Engineering Support Overhead costs $ 53,600 $ 536.00 per modification Number of modifications 100 Electricity Overhead costs 42,880 4.00 per machine hour Number of machine hours 10,720 Setup Overhead costs 171,520 $ 306.29 per batch Number of batches 560 Overhead Assigned Activity Driver Activity rate Total Overhead Cost 18 $ 6,400 modifications machine hours batches Product A Engineering support Electricity Setup Total overhead costs assigned Total units produced Overhead cost per unit 9,648 25,600 $ 536.00 4.00 306.29 per modification per machine hour per batch 200 $ 61,258 96,506 16,000 6.03 82 536.00 43,952 4,320 modifications machine hours batches 4.00 per modification per machine hour per batch 17,280 360 $ 306.29 110,264 171,496 3,600 Product B Engineering support Electricity Setup Total overhead costs assigned Total units produced Overhead cost per unit Total manufacturing costs Direct Materials per unit Direct Labor per unit Overhead per unit Total manufacturing cost per unit $ 47.64 Product A 15.00 $ Product B 30.00 40.50 47.64 13.50 6.03 $ 34.53 $ 118.14 3.2 What is the gross profit per unit? Product A Product B 220.00 55.00 Market price Manufacturing cost per unit Gross profit(loss) per unit (31.03) 20.47 X (107.64) 101.86 $ 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product A Product B Gross profit(loss) per unit $ 23.97 $ 112.36 Units purchased per customer 27 X 7% Gross profit (loss) per customer $ 546.00 $ 733.00 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 $ 479.40 $ 561.80 Customer service cost per customer 85.00 85.00 Profit (loss) per customer $ 394.40 $ 476.80 Is the profit adequate using ABC? Yes Yes 5. Which method of product costing gives better information to managers of this company? Method of product costing for better information Activity-based costing method