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

	Product A		Product B
Direct materials	$	15 per unit	$	24 per unit
Direct labor hours		0.3 DLH per unit		1.6 DLH per unit
Machine hours		0.1 MH per unit		1.2 MH per unit
Batches		125 batches		225 batches
Volume		10,000 units		2,000 units
Engineering modifications		12 modifications		58 modifications
Number of customers		500 customers		400 customers
Market price	$	30 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	$24500	Engineering Modified
Electricity	27000	Machine Hours
Setup Costs	41000	Batches
Nonmanufacturing
Customer Service	72000	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

1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours.
Overhead costs	$	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?
		0	0
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 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
		0
Electricity
		0
Setup
		0
Overhead Assigned	Activity Driver		Activity rate		Total Overhead Cost
Product A
Engineering support
Electricity
Setup
					$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

5.

Which method of product costing gives better information to managers of this company?

	Plantwide overhead rate method
	Departmental overhead rate method
	Activity-based costing method