The following data are for the two products produced by Tadros Company.
Product A Product B
...
The following data are for the two products produced by Tadros Company.
Product A Product B
Direct materials $ 20 per unit $ 25 per unit
Direct labor hours 0.5 DLH per unit 1.5 DLH per unit
Machine hours 0.4 MH per unit 1.2 MH per unit
Batches 200 batches 360 batches
Volume 16,000 units 3,600 units
Engineering modifications 20 modifications 80 modifications
Number of customers 800 customers 720 customers
Market price $ 55 per unit $ 220 per unit
The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows.
Costs Driver
Indirect manufacturing
Engineering support $ 53,600 Engineering modifications
Electricity 53,600 Machine hours
Setup costs 160,800 Batches
Nonmanufacturing
Customer service 136,800 Number of customers
What is the gross profit per unit?
Product A Product B
Market price $34.00 $95.00
Manufacturing cost per unit (20.33) (44.99)
Gross profit per unit $13.67 $50.01
Answers: 2
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