Walton Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Walton uses an activity-based costing system. The following are the relevant cost data for the previous month: Model ZM Direct Cost per Unit Direct materials Direct labor $20.70 29.40 Model DS $ 9.00 11.00 Category Unit level Batch level Product level Facility level Total Estimated cost $ 24,990 46,080 88,750 228,000 $387,820 Cost Driver Number of units Number of setups Number of TV commercials Number of machine hours Use of Cost Driver ZM: 2,500 units; DS: 9,400 units ZM: 24 setups; DS: 24 setups ZM: 16; DS: 9 ZM: 400 hours; DS: 800 hours Walton's facility has the capacity to operate 3,600 machine hours per month. Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $127 and for DS is $79. If Walton sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert believes that Walton can sell as many cameras as it can produce by pricing Model ZM at $122 and Model DS at $39. Walton would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $127 and for DS is $79. If Walton sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert believes that Walton can sell as many cameras as it can produce by pricing Model ZM at $122 and Model DS at $39. Walton would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the cost per unit for each product. (Round intermediate calculations and final answers to 2 decimal places.) Type of Product Total Direct Materials $ 20.70 + 9.00 + Model ZM Model DS Direct Labor $29.40 11.00 Allocated = Overhead $ 64.44 = $ 24.12 = 114.54 44.12 Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $127 and for DS is $79. If Walton sold all of its products at the market prices, what was its profit or loss for the previous month? c. A market expert believes that Walton can sell as many cameras as it can produce by pricing Model ZM at $122 and Model DS at $39. Walton would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? Complete this question by entering your answers in the tabs below. Required A Required B Required C The current market price for products comparable to Model ZM is $127 and for DS is $79. If Walton sold all of its products at the market prices, what was its profit or loss for the previous month? (Round intermediate calculations to 2 decimal places. Loss amounts should be indicated by a minus sign.) Amount Model ZM Model DS Profit Profit Required a. Compute the cost per unit for each product. b. The current market price for products comparable to Model ZM is $127 and for DS is $79. If Walton sold all of its products at the market prices, what was its profit or loss for the previous month? C. A market expert believes that Walton can sell as many cameras as it can produce by pricing Model ZM at $122 and Model DS at $39. Walton would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? Complete this question by entering your answers in the tabs below. Required A Required B Required C A market expert believes that Walton can sell as many cameras as it can produce by pricing Model ZM at $122 and Model DS at $39. Walton would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? (Round your answers to 2 decimal places.) Model ZM Model DS Target cost / unit
