Question

In: Accounting

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 company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.

Costs Driver
Indirect manufacturing
Engineering support $ 25,500 Engineering modifications
Electricity 22,000 Machine hours
Setup costs 43,000 Batches
Nonmanufacturing
Customer service 73,000 Number of customers


Required:

(Round your per unit cost answers to 2 decimal places and other answers to nearest whole number. Loss amounts should be indicated with minus sign.)

Solutions

Expert Solution

Product A is Profitable & Product B is loss making Product.


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