As the controller of Lynbrook, Inc., you have been asked to evaluate the costs of two...

 

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As the controller of Lynbrook, Inc., you have been asked to evaluate the costs of two of the products produced by the company using Activity Based Costing. You were given the following data to be used in your evaluation. Direct materials.. Direct labor hours. Machine hours Batches. Volume. Engineering modifications Number of customers.. Market price... Indirect manufacturing Engineering support Electricity.. Setup costs Nonmanufacturing Product A Customer service... $15 per unit 0.3 DLH per unit 0.1 MH per unit 125 batches 10,000 units 12 modifications 500 customers $30 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs $24,500 34,000 52,500 Product B 81,000 $24 per unit 1.6 DLH per unit 1.2 MH per unit 225 batches 2,000 units 58 modifications 400 customers $120 per unit Driver Engineering modifications Machine hours Batches Number of customers Required 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. What is the gross profit per unit? 2. How much gross profit is generated by each customer of Product A using the plantwide overhead rate? How much gross profit is generated by each customer of Product B using the plantwide overhead rate? 3. Determine the manufacturing cost per unit of each product line using ABC. What is the gross profit per unit? 4. How much gross profit is generated by each customer of Product A using ABC? How much gross profit is generated by each customer of Product B using ABC? 5. Which method of product costing gives better information to managers of this company? Explain why. As the controller of Lynbrook, Inc., you have been asked to evaluate the costs of two of the products produced by the company using Activity Based Costing. You were given the following data to be used in your evaluation. Direct materials.. Direct labor hours. Machine hours Batches. Volume. Engineering modifications Number of customers.. Market price... Indirect manufacturing Engineering support Electricity.. Setup costs Nonmanufacturing Product A Customer service... $15 per unit 0.3 DLH per unit 0.1 MH per unit 125 batches 10,000 units 12 modifications 500 customers $30 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs $24,500 34,000 52,500 Product B 81,000 $24 per unit 1.6 DLH per unit 1.2 MH per unit 225 batches 2,000 units 58 modifications 400 customers $120 per unit Driver Engineering modifications Machine hours Batches Number of customers Required 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. What is the gross profit per unit? 2. How much gross profit is generated by each customer of Product A using the plantwide overhead rate? How much gross profit is generated by each customer of Product B using the plantwide overhead rate? 3. Determine the manufacturing cost per unit of each product line using ABC. What is the gross profit per unit? 4. How much gross profit is generated by each customer of Product A using ABC? How much gross profit is generated by each customer of Product B using ABC? 5. Which method of product costing gives better information to managers of this company? Explain why. As the controller of Lynbrook, Inc., you have been asked to evaluate the costs of two of the products produced by the company using Activity Based Costing. You were given the following data to be used in your evaluation. Direct materials.. Direct labor hours. Machine hours Batches. Volume. Engineering modifications Number of customers.. Market price... Indirect manufacturing Engineering support Electricity.. Setup costs Nonmanufacturing Product A Customer service... $15 per unit 0.3 DLH per unit 0.1 MH per unit 125 batches 10,000 units 12 modifications 500 customers $30 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs $24,500 34,000 52,500 Product B 81,000 $24 per unit 1.6 DLH per unit 1.2 MH per unit 225 batches 2,000 units 58 modifications 400 customers $120 per unit Driver Engineering modifications Machine hours Batches Number of customers Required 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. What is the gross profit per unit? 2. How much gross profit is generated by each customer of Product A using the plantwide overhead rate? How much gross profit is generated by each customer of Product B using the plantwide overhead rate? 3. Determine the manufacturing cost per unit of each product line using ABC. What is the gross profit per unit? 4. How much gross profit is generated by each customer of Product A using ABC? How much gross profit is generated by each customer of Product B using ABC? 5. Which method of product costing gives better information to managers of this company? Explain why. As the controller of Lynbrook, Inc., you have been asked to evaluate the costs of two of the products produced by the company using Activity Based Costing. You were given the following data to be used in your evaluation. Direct materials.. Direct labor hours. Machine hours Batches. Volume. Engineering modifications Number of customers.. Market price... Indirect manufacturing Engineering support Electricity.. Setup costs Nonmanufacturing Product A Customer service... $15 per unit 0.3 DLH per unit 0.1 MH per unit 125 batches 10,000 units 12 modifications 500 customers $30 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs $24,500 34,000 52,500 Product B 81,000 $24 per unit 1.6 DLH per unit 1.2 MH per unit 225 batches 2,000 units 58 modifications 400 customers $120 per unit Driver Engineering modifications Machine hours Batches Number of customers Required 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours. What is the gross profit per unit? 2. How much gross profit is generated by each customer of Product A using the plantwide overhead rate? How much gross profit is generated by each customer of Product B using the plantwide overhead rate? 3. Determine the manufacturing cost per unit of each product line using ABC. What is the gross profit per unit? 4. How much gross profit is generated by each customer of Product A using ABC? How much gross profit is generated by each customer of Product B using ABC? 5. Which method of product costing gives better information to managers of this company? Explain why.

Answer rating: 100% (QA)

Working note Volume Direct labor hours per unit Total DL hours Machine hours per unit Total Machine ... View the full answer