Question

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 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs Driver   Indirect manufacturing         Engineering support $ 26,500 Engineering modifications         Electricity 24,800 Machine hours         Setup costs 42,000 Batches   Nonmanufacturing         Customer service 72,000 Number of customers

1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. 0 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Product A Product B Product A Product B 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 A Product B 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? 0 Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate? Product A Product B 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 0 Electricity 0 Setup 0 Overhead Assigned Activity Driver Activity rate Total Overhead Cost Product A Engineering support Electricity Setup $0 Product B Engineering support Electricity Setup $0 Total manufacturing costs Product A Product B Direct Materials per unit 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 (27.44) (85.44) 4.1 How much gross profit is generated by each customer of Product A and Product B using ABC? Product A Product B 0 Units purchased per customer 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 customer Customer service cost per customer Profit (loss) per customer Is the profit adequate using ABC?

Answer 1