Question
In: Accounting
consider the following data for two products of gitano manufacturing number id units produced product a...
consider the following data for two products of gitano
manufacturing
number id units produced product a 11,500 units product b 1300
units
direct labor cost (@ $27 per DLH) product a 0.14 DLH per unit
product b 0.28 DLH per unit
direct materials cost product a $2 per unit product b $2.50
per unit
machine setup overhead costs $51,176
materials handling $ 55,000
quality control inspections $79,380
total $ 185,556
round to two decimal places
1.
use direct labor hours as the basis for assigning overhead costs,
determine the total production costs per unit for each product line
2. if the market price for product a is $24.06 and the market
price for product b is $57, determine the profit or loss per unit
for each product.
3. consider the following additional information about these
two product lines. if abc is used for assigning overhead costs to
products, what is the cost per unit for product a and b.
4. determine the profit or loss per unit for each product
assuming abc costing
Solutions
Expert Solution
| Gitano Manufacturing | ||||||
| 1) Statement of Production Cost per unit | ||||||
| All Figs in $ | ||||||
| Particulars | Product A | Product B | ||||
| Units Produced | 11500 | 1300 | ||||
| Direct Material Cost | $2 per unit | 23000 | $2.5 per unit | 3250 | ||
| Direct Labour Cost (Note b) | $27 x 0.14 | 43470 | $27 x 0.28 | 9828 | ||
| Manufacturing overhead (Note c) | 151340 | 34216 | ||||
| Total Production Cost | 217810 | 47294 | ||||
| Production cost per unit | 18.94 | 36.38 | ||||
| 2) Statement of profit or loss per unit for each product | ||||||
| Particulars | Product A | Product B | ||||
| Market Price per unit (A) | 24.06 | 57 | ||||
| Production Cost per unit (B) | 18.94 | 36.38 | ||||
| Profit Per Unit (A-B) | 5.12 | 20.62 | ||||
| Workings: | Product A | Product B | Total | |||
| a) Cal. Of Direct Labour Hour | ||||||
| For 1 unit | 0.14 hr | 0.28 hr | ||||
| Total Direct Labour Hour | For 11500 units | 1610 hr | For 1300 units | 364 | ||
| b) Total Direct Labour Cost | 1610 x $27 | 43470 | 364 x $27 | 9828 | ||
| c) Manufacturing overhead | ||||||
| Machine setup Overhead Cost | 51176 | |||||
| Materials Handling | 55000 | |||||
| Quality Control inspections | 79380 | |||||
| Total | For 1610 hr | 151340 | For 364 hr | 34216 | 185556 | |
| 3) Statement of Cost per unit under ABC | ||||||
| Particulars | Product A | Product B | ||||
| Units Produced | 11500 | 1300 | ||||
| Direct Material Cost | $2 per unit | 23000 | $2.5 per unit | 3250 | ||
| Direct Labour Cost (Note b) | $27 x 0.14 | 43470 | $27 x 0.28 | 9828 | ||
| Manufacturing overhead (Note d) | 162471 | 23085 | ||||
| Total Production Cost | 228941 | 36163 | ||||
| Production cost per unit | 19.91 | 27.82 | ||||
| 4) Statement of profit or loss per unit for each product under ABC | ||||||
| Particulars | Product A | Product B | ||||
| Market Price per unit (A) | 24.06 | 57 | ||||
| Production Cost per unit (B) | 19.91 | 27.82 | ||||
 ekkarill92 answered 1 year agoRelated SolutionsConsider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with...Consider the following data for two products of Gitano
Manufacturing. (Loss amounts should be indicated with a
minus sign. Round your intermediate calculations and "OH rate and
cost per unit" answers to 2 decimal places.)
Product A
Product B
Number of units produced
10,500 units
1,800 units
Direct labor cost (@ $28 per DLH)
0.17 DLH per unit
0.21 DLH per unit
Direct materials cost
$ 1.90 per unit
$ 2.30 per unit
Activity
Overhead costs
Machine setup
$...
4.5 Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated...4.5 Consider the following data for two products of Gitano
Manufacturing. (Loss amounts should be indicated with a minus sign.
Round your intermediate calculations and "OH rate and cost per
unit" answers to 2 decimal places.) Product A Product B Number of
units produced 11,000 units 1,700 units Direct labor cost (@ $24
per DLH) 0.15 DLH per unit 0.26 DLH per unit Direct materials cost
$ 2.00 per unit $ 3.10 per unit Activity Overhead costs Machine
setup $...
The following data are for the two products produced by Tadros Company. Product A Product...The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct materials
$
14 per unit
$
26 per unit
Direct labor hours
0.5 DLH per unit
1.5 DLH per unit
Machine hours
0.4 MH per unit
1.1 MH per unit
Batches
100 batches
200 batches
Volume
10,000 units
2,000 units
Engineering modifications
9 modifications
45 modifications
Number of customers
500 customers
400 customers
Market price
$
34 per unit
$
95...
The following data are for the two products produced by Tadros Company. Product A Product...
The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct materials
$
14 per unit
$
26 per unit
Direct labor hours
0.5 DLH per
unit
1.5 DLH per
unit
Machine hours
0.4 MH per
unit
1.1 MH per
unit
Batches
100 batches
200 batches
Volume
10,000
units
2,000 units
Engineering modifications
9
modifications
45
modifications
Number of customers
500
customers
400
customers
Market price
$
34 per unit
$
95...
The following data are for the two products produced by Shakti Company. Product A Product B...The following data are for the two products produced by Shakti
Company.
Product A
Product B
Direct materials
$
15 per unit
$
24 per unit
Direct labor hours
0.3 DLH per unit
1.6 DLH per unit
Machine hours
0.1 MH per unit
1.2 MH per unit
Batches
125 batches
225 batches
Volume
10,000 units
2,000 units
Engineering modifications
12 modifications
58 modifications
Number of customers
500 customers
400 customers
Market price
$
30 per unit
$
120 per unit...
The following data are for the two products produced by Tadros Company. Product A Product B...The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct materials
$
14 per unit
$
25 per unit
Direct labor hours
0.6 DLH per unit
1.5 DLH per unit
Machine hours
0.5 MH per unit
1.1 MH per unit
Batches
100 batches
200 batches
Volume
10,000 units
2,000 units
Engineering modifications
10 modifications
50 modifications
Number of customers
500 customers
400 customers
Market price
$
34 per unit
$
120 per unit...
The following data are for the two products produced by Tadros Company. Product A Product B...The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct materials
$
14 per unit
$
26 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
115 batches
230 batches
Volume
10,000 units
2,000 units
Engineering modifications
10 modifications
50 modifications
Number of customers
500 customers
400 customers
Market price
$
35 per unit
$
120 per unit...
The following data are for the two products produced by Tadros Company. Product A Product B...The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct
materials
$
14 per unit
$
24 per unit
Direct labor hours
0.6 DLH per unit
1.5 DLH per unit
Machine hours
0.5 MH per unit
1.1 MH per unit
Batches
125 batches
250 batches
Volume
10,000 units
2,000 units
Engineering modifications
10 modifications
50 modifications
Number of customers
500 customers
400 customers
Market price
$
34 per unit
$
95 per unit...
A company manufacturing 2 products furnishes the following data for a year: Product Annual output (Units)...A company manufacturing 2 products furnishes the following data
for a year:
Product
Annual output (Units)
Total machine hours
Total number of purchase orders
Total number of machine set-ups
A
5,000
20,000
160
20
B
60,000
120,000
384
44
The annual overheads are:
£
Volume Related Activity Costs
550,000
Setup Related Costs
820,000
Purchase Related Costs
618,000
You are required to calculate the cost per unit of each product
A and B based on:
Traditional method of charging overheads (Absorption...
Consider the following production and cost data for two products, L and C: Product L Product...
Consider the following production and cost data for two
products, L and C:
Product L
Product C
Contribution margin per unit
$27
$22
Machine-hours needed per unit
3 hours
2 hours
The company can only perform 14,500 machine hours each period,
due to limited skilled labor and there is unlimited demand for each
product. What is the largest possible total contribution margin
that can be realized each period?
Multiple Choice
$145,000
$149,750
$159,500
$174,000
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|