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The XYZ Company produces two of types widgets: standard and deluxe. The current cost sytem applies OH on the basis of DL hours. Mangement is
| The XYZ Company produces two of types widgets: standard and deluxe. The current cost sytem | ||||
| applies OH on the basis of DL hours. Mangement is concerned about eroding profit margins on | ||||
| the standard widgets. Information about the production process is presented below. | ||||
| standard | deluxe | total | ||
| quantity produced | 8,650 | 990 | ||
| selling price per widget | $83.00 | $225.00 | ||
| DM cost per widget | $18.75 | $42.60 | ||
| DL cost per widget | $10.00 | $13.00 | ||
| DL cost per hour | $19.00 | $23.00 | ||
| total OH (fixed cost) | $683,000 | |||
What is the gross profit per widget (per unit) using the current cost system?
| standard | deluxe | total | ||
| price | $83.00 | $225.00 | ||
| DM | $18.75 | $42.60 | ||
| DL | $10.00 | $13.00 | ||
| OH | ||||
| gross profit | ||||
| gross margin |
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