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Determine the manufacturing cost per unit for each of the products using the volume-based method. (Round your intermediate calculations and final answers to 2 decimal places.) Product A Product B Product C Materials Labor Overhead Total cost

Determine the manufacturing cost per unit for each of the products using the volume-based method. (Round your intermediate calculations and final answers to 2 decimal places.) Product A Product B Product C Materials Labor Overhead Total cost

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Eastern Chemical Company produces three products. The operating results of the current year are: Actual Price $382.00 271.60 326.00 Sales Product Quantity A B C 1,858 9,258 925 Target Price $ 301.00 313.60 218.50 Direct materials Direct labor Total prime cost The firm sets the target price of each product at 150% of the product's total manufacturing cost. It appears that the firm was able to sell Product Cat a much higher price than the target price of the product and lost money on Product B. Tom Watson, CEO, wants to promote Product C much more aggressively and phase out Product B. He believes that the information suggests that Product C has the greatest potential among the firm's three products because the actual selling price of Product C was almost 50% higher than the target price, while the firm was forced to sell Product B at a price below the target price. Both the budgeted and actual factory overhead for the current year are $847,300. The actual units sold for each product also are the same as the budgeted units. The firm uses direct labor dollars to assign manufacturing overhead costs. The direct materials and direct labor costs per unit for each product are: Difference $ 1.00 (42.80) $ 107.50 Product A $ 66.08 36.00 $ 182.00 Number of setups Weight of direct materials (pounds) Waste and hazardous disposals Quality inspections Utilities (machine hours) Total Product B $ 130.48 28.08 $158.48 The controller noticed that not all products consumed factory overhead similarly. Upon further investigation, she identified the following usage of factory overhead during the year: Product C $ 81.00 18.50 $ 99.50 Product A 3 416 41 46 3,780 Product B 6 266 61 51 8,600 Product C 4 366 46 51 1,850 Total Overhead $ 8,300 283,580 462,580 91,080 82,080 $ 847,380 Required: 1. Determine the manufacturing cost per unit for each of the products using the volume-based method.
Transcribed Image Text:Eastern Chemical Company produces three products. The operating results of the current year are: Actual Price $382.00 271.60 326.00 Sales Product Quantity A B C 1,858 9,258 925 Target Price $ 301.00 313.60 218.50 Direct materials Direct labor Total prime cost The firm sets the target price of each product at 150% of the product's total manufacturing cost. It appears that the firm was able to sell Product Cat a much higher price than the target price of the product and lost money on Product B. Tom Watson, CEO, wants to promote Product C much more aggressively and phase out Product B. He believes that the information suggests that Product C has the greatest potential among the firm's three products because the actual selling price of Product C was almost 50% higher than the target price, while the firm was forced to sell Product B at a price below the target price. Both the budgeted and actual factory overhead for the current year are $847,300. The actual units sold for each product also are the same as the budgeted units. The firm uses direct labor dollars to assign manufacturing overhead costs. The direct materials and direct labor costs per unit for each product are: Difference $ 1.00 (42.80) $ 107.50 Product A $ 66.08 36.00 $ 182.00 Number of setups Weight of direct materials (pounds) Waste and hazardous disposals Quality inspections Utilities (machine hours) Total Product B $ 130.48 28.08 $158.48 The controller noticed that not all products consumed factory overhead similarly. Upon further investigation, she identified the following usage of factory overhead during the year: Product C $ 81.00 18.50 $ 99.50 Product A 3 416 41 46 3,780 Product B 6 266 61 51 8,600 Product C 4 366 46 51 1,850 Total Overhead $ 8,300 283,580 462,580 91,080 82,080 $ 847,380 Required: 1. Determine the manufacturing cost per unit for each of the products using the volume-based method.
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the manufacturing cost per unit for each of the products using the volume-based method. (Round your intermediate calculations and final answers to 2 decimal places.) Product B Materials Labor Overhead Required 3 Total cost Product A Product C < Required 1 Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the manufacturing cost per unit for each of the products using the volume-based method. (Round your intermediate calculations and final answers to 2 decimal places.) Product B Materials Labor Overhead Required 3 Total cost Product A Product C < Required 1 Required 2 >
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