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The following data are for the two products produced by Tadros Company. Product A Product B $ 14 per unit 0.4 DLH per unit 0.3
The following data are for the two products produced by Tadros Company. Product A Product B $ 14 per unit 0.4 DLH per unit 0.3 MH per unit 115 batches $ 26 per unit 1.5 DLH per unit 1.1 MH per unit 230 batches Direct materials Direct labor hours Machine hours Batches Volume Engineering modifications Number of customers 10,000 units 9 modifications 2,000 units 45 modifications 500 customers 400 customers Market price $ 35 per unit $ 95 per unit 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 $ 26,000 Engineering modifications 26,000 Machine hours 40,000 Batches Customer service 70,000 Number of customers 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. Overhead Assigned Product A Activity Plantwide OH Total Overhead rate ost Units Produced Driver Cost per unit Product B Product B Product A 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 B Product A 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 B Product A 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 Total Overhead Cost Overhead Assigned Activity rate Activity Driver Product A Engineering support Electricity Setup 24 Product B Engineering support Electricity Setup Total manufacturing costs Direct Materials per unit Product A Product B 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 (85.67) (25.27) 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product A Product B Units purchased per Icustomer 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 Icustomer Customer service cost per customer Profit (loss) per customer Is the profit adequate using ABC
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