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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 $14 per unit 0.6 DLH per unit 0.5 MH per unit 100 batches 10.000 units 9 modifications 500 customers $35 per unit Product B $28 per unit 1.5 DLH per unit 1.1 MH per unit 200 batches 2,000 units 45 modifications 400 customers 95 per unit per Yunst The company's direct labor rate is $20 per direct labor hour (DLH). Additional Information follows. Costs Driver Indirect manufacturing Engineering support Electricity Setup costs Nonmanufacturing Customer service $23,000 Engineering modifications 36,000 Machine hours 40,000 Batches 73,000 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 slgn.) 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? Product A Product B Gross profit per customer Customer service cost per 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 Electricity Setup Overhead Assigned Activity Driver Activity rate Total Overhead Cost Product A Engineering support Electricity Setup Product B Engineering support Electricity Setup Product 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 (30.22) (86.42) 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product 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? Activity-based costing method Departmental overhead rate method Plantwide overhead rate method
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