Pringle and Company manufactures several kinds of canoes. This past year, Pringle spent $11,750,000 on fixed manufacturing costs, $1,762,500 on fixed selling and administrative costs, and $23,500,000 on direct labor. Pringle produced 58,750 canoes and sold 55,000 during the year.
The following table provides the direct materials and labor costs for three of Pringle€™s canoes:

Required:
a. GAAP dictates that all manufacturing costs be included in product cost. Assume that Pringle allocates fixed costs using the number of units produced as the allocation basis.
Under GAAP, what is the inventoriable cost per unit of each of the three canoes?
b. Assume that Pringle allocates fixed costs using direct labor costs as the allocation basis. Under GAAP, what is the inventoriable cost per unit of each of the three canoes?
c. Compare the answers to parts (a) and (b). Comment on any differences in inventoriablecost.

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Model X-5 $100 $300 Mdel XV-10 $175 $400 Model XV-20 $300 $700 Materials cost Labor cost