Question

The following data are for the two products produced by Tadros Company.

The following data are for the two products produced by Tadros Company. Direct materials Direct labor hours Machine hours Batches Volume Engineering modifications Number of customers Market price Product A $15 per unit 0.5 DLH per unit 0.4 MH per unit 200 batches 16,000 units 18 modifications 600 customers $55 per unit Product B $30 per unit 1.5 DLH per unit 1.2 MH per unit 360 batches 3,600 units 82 modifications 500 customers $220 per unit The company's direct labor rate is $27 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing Engineering support Electricity Setup costs Nonmanufacturing Customer service $ 53,600 Engineering modifications 42,880 Machine hours 171,520 Batches 93,500 Number of customers

Answer 1

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Answers provided in the question are correct. There are no errors in it. Answer 2.1 Answer 1 Total Manufacturing cost per unit Product A Product B Direct Material cost per unit $ 15.00$ 30.00 Direct Labour cost per unit $ 13.50 $ 40.50 Overhead cost per unit $ 10.00 $ 30.00 Total Manufacturing cost $ 38.50 $ 100.50 Gross Profit per unit Units purchased per customer Gross Profit per customer Product A Product B $ 16.50 $ 119.50 $ 26.67$ 7.20 $ 440.00 $ 860.40 Working Direct Labour cost per unit Direct labour hours Direct labour rate Direct Labour cost Product A Product B 0.5 1.5 $ 27$ 27 $ 13.50 $ 40.50 Working Units purchased per customer Product A Product B Volume (in units) (A) 16000 3600 No. of customers (B) 600 500 Units purchased per customer (A/B) 26.67 7.20 Answer 1.2 Gross Profit per unit Market price Manufacturing cost per unit Gross Profit per unit Product A Product B $ 55.00 $ 220.00 $ 38.50 $ 100.50 $ 16.50 $ 119.50 Answer 2.2 Product A Product B Gross Profit per customer $ 440.00 $ 860.40 Customer service cost per customer $ 85.00 $ 85.00 Profit(loss) per customer $ 355.00 $ 775.40 Is the profit adequate Yes Yes Answer 4.1 Answer 3.1 Total Manufacturing cost per unit Product A Product B Direct Material cost per unit $ 15.00$ 30.00 Direct Labour cost per unit $ 13.50 $ 40.50 Overhead cost per unit $ 6.03 $ 47.64 Total Manufacturing cost $ 34.53 $ 118.14 Gross Profit per unit Units purchased per customer Gross Profit per customer Product A Product B $ 20.47 $ 101.86 $ 26.67 $ 7.20 $ 545.87 $ 733.39 Working Direct Labour cost per unit Direct labour hours Direct labour rate Direct Labour cost Working Units purchased per customer Product A Product B Volume (in units) (A) 16000 3600 No. of customers (B) Units purchased per customer (A/B) 26.67 7.20 600 Product A Product B 0.5 1.5 $ 27 $ 27 $ 13.50 $ 40.50 500 Answer 3.2 Gross Profit per unit Market price Manufacturing cost per unit Gross Profit per unit Product A Product B $ 55.00 $ 220.00 $ 34.53 $ 118.14 $ 20.47 $ 101.86 Answer 4.2 Product A Product B Gross Profit per customer $ 545.87 $ 733.39 Customer service cost per customer $ 85.00$ 85.00 Profit(loss) per customer $ 460.87 $ 648.39 Is the profit adequate Yes Yes