The following data are for the two products produced by Tadr

The following data are for the two products produced by Tadros Company. Product A 13 per unit 0.4 DLH per unit 0.3 MH per unit 125 batches 10,000 units 10 modifications 500 customers Product B Direct materials Direct labor hours Machine hours Batches Volume Engineering modifications Number of customers Market price $ 28 per unit 1.5 DLH per unit 1.1 MH per unit 250 batches 2,000 units 50 modifications 400 customers $ 35 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 $ 24,000 Engineering modifications Engineering support Electricity Setup costs 26,000 Machine hours 43,000 Batches Nonmanufacturing Customer service 75,000 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.) 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours OH Cost per unit Overhead Assigned ProductA Product EB Plantwide OH rate Total Overhead Cost Units Produced Driver Product A Product B

Solution

1) Plant wide overhead rate = total overhead cost / total direct labour hours

Total manufacturing overhead cost:

Total direct labor hours = DL for product A + DL for prodct B

= (0.4*10000)+(1.5*2000)

= 7000 hours

Manufacturing overhead rate = 93000 / 7000

= $13.28

Overhrad cost per unit using DL as plantwide rate for overhead allocation:

Manufacturng cost per unit

1.2) Gross profit per unit

2.1) Gross profit per customer

2.2) The cost of providing customer service to each customer = total customer service cost / total number of customers

= 75000 / 900

= $83.33

Engineering support	$24,000
Electricity	$26,000
Set up costs	$43,000
Indirect manufacturing cost	$93,000