Sheridan Manufacturing provides the following data about its three products.

You also know that the firm has $39,000 in materials-related overhead, $486,200 in labor-related overhead, and $784,687.50 in machine-related overhead costs. The firm allocated materials- and labor-related overhead as a percentage of materials and labor costs, respectively. Machine hours are the allocation basis for machine related overhead.

Required:
a. Determine the inventoriable cost per unit for each of the firm€™s three products.
b. The firm€™s managers argue that the unit inventoriable cost is the floor for prices. After all, they say, the number even excludes controllable sales and administration costs. Do youagree?

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Product number A-104 RJ-95 XL-435 10,000 15,000 2,500 Units per year Machine hours/un 2.5 Materials cost/un $5.00 $6.50 9.00 Labor cost/unit 2.6 3.25 $7.50 $9.60 $12.40