Business, 22.02.2021 19:10 Arealbot

The following data are for the two products produced by Tadros Company. Product A Product B
Direct materials $ 20 per unit $ 25 per unit
Direct labor hours 0.5 DLH per unit 1.5 DLH per unit
Machine hours 0.4 MH per unit 1.2 MH per unit
Batches 200 batches 360 batches
Volume 16,000 units 3,600 units
Engineering modifications 20 modifications 80 modifications
Number of customers 800 customers 720 customers
Market price $ 55 per unit $ 220 per unit
The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.
Costs Driver
Indirect manufacturing
Engineering support $ 53,600 Engineering modifications
Electricity 53,600 Machine hours
Setup costs 160,800 Batches
Nonmanufacturing
Customer service 136,800 Number of customers
What is the gross profit per unit?
Product A Product B
Market price $34.00 $95.00
Manufacturing cost per unit (20.33) (44.99)
Gross profit per unit $13.67 $50.01

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Answer from: MysteryDove12

Tadros Company

The gross profit per unit:

Product A Product B

Gross profit per unit $18.74 $118.39

Explanation:

a) Data and Calculations:

Product A Product B

Direct materials per unit $ 20 $ 25

Direct labor hours per unit DLH 0.5 1.5

Machine hours per unit 0.4 1.2

Batches 200 360

Volume (units) 16,000 3,600

Engineering modifications 20 80

Number of customers 800 720

Market price per unit $ 55 $ 220

Direct labor rate = $20 per DLH

Cost Pools Overhead Costs Driver

Indirect manufacturing

Engineering support $ 53,600 Engineering modifications

Electricity 53,600 Machine hours

Setup costs 160,800 Batches

Nonmanufacturing

Customer service 136,800 Number of customers

Overhead rate using ABC:

Cost Pools Overhead Costs Driver Rates

Indirect manufacturing

Engineering support $ 53,600 100 modifications = $536

Electricity 53,600 10,720 Machine hours $5

Setup costs 160,800 560 Batches $287

Customer service 136,800 1,520 customers $90

Cost of production:

Product A Product B

Direct materials per unit $320,000 $90,000

Direct labor hours per unit DLH 160,000 108,000

Overhead costs:

Engineering support 10,720 42,880

Electricity 32,000 21,600

Setup costs 57,400 103,320

Total production costs $580,120 $365,800

Manufacturing cost per unit $36.26 $101.61

Sales Revenue ($55 and $220) 880,000 792,000

Gross profit $299,880 $426,200

Gross profit per unit $18.74 $118.39

Answer from: Quest

Answerlowest price a firm would have been willing to accept; price it actually receives;

Answer from: Quest

the correct answer will be d

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