Kimbro Furniture manufactures computer desks in its Austin, Texas, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow:

The company produced two styles of desks in March: the Standard desk and the Unpainted desk. Data for each follow:

Requirements
1. Compute the per-unit manufacturing product cost of Standard desks and unpainted desks.
2. Pre manufacturing activities, such as product design, were assigned to the Standard desks at $4 each and to the unpainted desks at $2 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $21 per Standard and $19 per unpainted desk. Compute the full product costs per desk.
3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.
4. What price should management set for Standard desks to earn a $39 profit per desk?

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Cost Allocation Budgeted Cost Allocation Base Number of parts Direct labor hours Number of painted desks of Activity $ 310,000 Activity Materials handling Rate $ 0.90 $2,400,000 $17.00 Assembling. Painting . $ 190,000 $ 5.00 Total Units Produced Total Direct Materials Costs Total Number of Total Assembling Direct Labor Product Parts 119,500 29,500 Hours Standard desk. Unpainted desk 6,000 $165,450 7,500 1,500 $ 21,350 800