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

	Product A			Product B
Direct materials	$	14 per unit		$	28 per unit
Direct labor hours		0.3 DLH per unit			1.6 DLH per unit
Machine hours		0.2 MH per unit			1.2 MH per unit
Batches		110 batches			220 batches
Volume		10,000 units			2,000 units
Engineering modifications		11 modifications			55 modifications
Number of customers		500 customers			400 customers
Market price	$	35 per unit		$	95 per unit per unit

The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.

	Costs			Driver
Indirect manufacturing
Engineering support	$	24,500		Engineering modifications
Electricity		22,000		Machine hours
Setup costs		42,000		Batches
Nonmanufacturing
Customer service		72,000		Number of customers

1. Compute the manufacturing cost per unit using the plantwide overhead rate based on 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?
		Product A	Product B
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?
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?

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.)

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

• Plantwide overhead rate method

• Activity-based costing method

• Departmental overhead rate method