Tent Pro produces two lines of tents sold to outdoor enthusiasts. The tents are cut to specifications in department A. In department B the tents are sewn and folded. The activities, costs, and drivers associated with these two manufacturing processes and the company's production support activities follow.

Additional production information on the two lines of tents follows.

Required
1. Using a plantwide overhead rate based on direct labor hours, compute the overhead cost that is assigned to each pup tent and each pop-up tent.
2. Using the plantwide overhead rate, determine the total cost per unit for the two products if the direct materials and direct labor cost is $25 per pup tent and $32 per pop-up tent.
3. If the market price of the pup tent is $65 and the market price of the pop-up tent is $200, determine the gross profit per unit for each tent. What might management conclude about the pup tent?
4. Using ABC, compute the total cost per unit for each tent if the direct labor and direct materials cost is $25 per pup tent and $32 per pop-up tent.
5. If the market price is $65 per pup tent and $200 per pop-up tent, determine the gross profit per unit for each tent. Comment on the results.
6. Would your pricing analysis be improved if the company used, instead of ABC, departmental rates determined using machine hours in department A and direct labor hours in department B? Explain.

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Process Activity Overhead Cost Driver Quantity Department A Pattern alignment Cutting Moving product $64,400 50,430 Batches Machine hours 560 2,300 2,400 100,800Moves $215,630 4,200 600 22,800 Department B Sewing $327,600 24,000 Direct labor hours Inspections Inspecting Folding 47880 Units $399,480 Design Providing space 280 8,600 920,000 Support $280,000 51,600 84,000 $515,600 Modification orders Square feet Is handling 1 Square yards Pup Tent Pop-Up Tent 7,600 units 1,600 moves 420 batches 360 inspections 5,300 MH 1,600 DLH 210 modification orders 4,300 square feet 470,000 square yards Units produced Moves. 15,200 units 800 moves Number of inspections Machine hours Direct labor hours Modification orders.... . 240 inspections 7,000 MH 2,600 DLH 70 modification orders 4,300 square feet Material required . .. 450,000 square yards