Question

Check my work Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places.) 10 Product A 12,000 units 0.16 DLH per unit $ 2.00 per unit Number of units produced Direct labor cost ($28 per DLH) Direct materials cost Product B 1,700 units 0.25 DLH per unit $ 2.30 per unit points eBook Activity Machine setup Materials handling Quality control inspections Overhead costs $ 77,305 60,000 85, 470 $222,775 Hint Required: Print 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. ul References Overhead costs Direct labor hours Overhead Assigned $ 222,775 $ 95.00 per direct labor hour 2,345 Activity Driver Plantwide OH rate Total Overhead Cost 1,920 $ 95.00 $ 182,400 [ 425 $ 95.00 $ 40,375 Product A Product B Units Produced 12,000 1,700 OH Cost per unit $ 15.20 $ 23.75 Product B 2.30 $ Total manufacturing cost per unit: Direct material cost per unit Direct labor cost per unit Overhead cost per unit Total manufacturing cost Product A 2.00 $ 4.48 15.20 21.68 $ 7.00 23.75 $ 33.05

For some reason I'm stuck on this one. Also, while solving can you note how you found the total number of parts for product A. Thanks!

Answer 1

1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours.
	95	per DLH
Overhead Assigned	Activity Driver	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Product A	1,920	95	182,400	12,000	15.2
Product B	425	95	40,375	1,700	23.75
		Product A	Product B
Direct Material		2	2.3
Direct Labor		4.48	7
Overhead		15.2	23.75
Cost per Unit		21.68	33.05
1.2 What is the gross profit per unit?
		Product A	Product B
Market price		26.8	64
Cost per Unit		21.68	33.05
Gross profit per unit		5.12	30.95
Machine Set up
Overheaed costs	77305	3361.08696	per setup
Number of Setups	23
Material handling	60000
Number of parts	198800	0.30181087	per part
QC	85470	330	per hour
Inspection hours	259
Overhead Assigned	Activity Driver		Activity rate		Total Overhead Cost
Product A
Set up	11		3361.08696		36,972
Handling	192000		0		57,948
QC	54		330		17,820
					$112,740
Number of units					12000
Per unit					$9.39
Product B
Set up	12		3361.08696		40,333
Handling	6,800		0.30181087		2,052
QC	205		330		67,650
					$110,035
Number of units					1700
Per unit					$64.73
Total manufacturing costs		Product A	Product B
Direct Materials per unit		2	2.3
Direct Labor per unit		4.48	7
Overhead per unit		$9.39	$64.73
Total manufacturing cost per unit		15.8749702	74.0266808
3.2 What is the gross profit per unit?
		Product A	Product B
Market price		26.8	64
Cost per Unit		15.8749702	74.0266808
Gross Profit		10.9250298	-10.0266808
Yes
Please note total number of parts for product A = 12000*16 = 192000 parts