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Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Per Unit Selling price Direct materials Direct labor Standard $76 38 28 1. Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. Product cost per unit: Standard Deluxe 2. Using activity-based costing, the company computes overhead cost per unit of $4 for the standard model and $47 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit. Gross profit per unit: Standard Deluxe Complete this question by entering your answers in the tabs below. $ $ Required 1 Required 2 Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. (A negative gross profit should be indicated with a minus sign.) Deluxe $ 110 Direct materials 43 33 Selling price Which model should the company produce? 38 $ 43 $ Direct Labor Product cost 28 33 Overhead Gross profit Product Cost per unit Prev 2 of 4 BE www Next

Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Per Unit Selling price Direct materials Direct labor Standard $76 38 28 1. Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. Product cost per unit: Standard Deluxe 2. Using activity-based costing, the company computes overhead cost per unit of $4 for the standard model and $47 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit. Gross profit per unit: Standard Deluxe Complete this question by entering your answers in the tabs below. $ $ Required 1 Required 2 Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. (A negative gross profit should be indicated with a minus sign.) Deluxe $ 110 Direct materials 43 33 Selling price Which model should the company produce? 38 $ 43 $ Direct Labor Product cost 28 33 Overhead Gross profit Product Cost per unit Prev 2 of 4 BE www Next

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Standard $76 Per Unit Selling price Direct materials Direct labor 1. Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. 2. Using activity-based costing, the company computes overhead cost per unit of $4 for the standard model and $47 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit. Required 1 Required 2 38 28 Complete this question by entering your answers in the tabs below. Product cost per unit: Standard Deluxe Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. (A negative gross profit should be indicated with a minus sign.) Gross profit per unit: Standard Deluxe $ $ Deluxe $ 110 43 33 Direct materials Selling price Which model should the company produce? 38 $ 43 $ Direct Labor Product cost 28 33 Overhead Gross profit Product Cost per unit < Prev 2 of 4 Next >
Transcribed Image Text:Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Standard $76 Per Unit Selling price Direct materials Direct labor 1. Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. 2. Using activity-based costing, the company computes overhead cost per unit of $4 for the standard model and $47 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit. Required 1 Required 2 38 28 Complete this question by entering your answers in the tabs below. Product cost per unit: Standard Deluxe Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. (A negative gross profit should be indicated with a minus sign.) Gross profit per unit: Standard Deluxe $ $ Deluxe $ 110 43 33 Direct materials Selling price Which model should the company produce? 38 $ 43 $ Direct Labor Product cost 28 33 Overhead Gross profit Product Cost per unit < Prev 2 of 4 Next >
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