The following data are for the two products produced by Tadros Company.Product A Product BDirect materials $15 per unit $24 per
unitDirect labor hours 0.3 DLH per unit 1.6 DLH per unitMachine hours 0.1 MH per unit 1.2 MH per unitBatches 125 batches 225 batchesVolume 10,000 units 2,000 unitsEngineering modifications 12 modifications 58 modificationsNumber of customers 500 customers 400 customersMarket price $30 per unit $120 per unitThe company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.Costs DriverIndirect manufacturing Engineering support $24,500 Engineering modificationsElectricity 34,000 Machine hoursSetup costs 52,500 BatchesNonmanufacturing Customer service 81,000 Number of customers1.1 Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours.1.2 What is the 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?2.2 What is the cost of providing customer service to each customer?Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate?3.1 Determine the manufacturing cost per unit of each product line using ABC.3.2 What is the gross profit per unit?4.1 How much gross profit is generated by each customer of Product A and Product B using ABC?4.2 Is the gross profit adequate for each customer of Product A and B using ABC?5. Which method of product costing gives better information to managers of this company?a. Plantwide overhead rate methodb. Departmental overhead rate methodc. Activity-based costing method
