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PROBLEM SET A The following data are for the two products produced by Tadros Company Product A Product B Problem 17-1A Comparing costs using ABC with the plantwide overhead rate P1 P3 A1 A2 Direct materials Direct labor hours Machine hours $15 per unit 0.3 DLH per unit 1.6 DLH per unit . 0.1 MH per unit .2 MH per unit $24 per unit 225 batches 2,000 units 10,000 units Volume Engineering modifications Number of customers Market price . 12 modifications 58 modifications 500 customers 400 customers $30 per unit $120 per unit Chapter 17 Activity-Based Costing and Analysis 767 The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows. Costs Driver Indirect manufacturing .. . . .. . .$24,500 Engineering modifications Engineering support Electricity Setup costs 34,000 Machine hours 52,500 Batches Customer service 81,000 Number of customers Required 1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor Check 1) Product A, $26.37 per hours. What is the gross profit per unit? unit cost 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 over- head rate? What is the cost of providing customer service to each customer? What information is provided by this comparison? 3. Determine the manufacturing cost per unit of each product line using ABC. What is the gross profit 4. How much gross profit is generated by each customer of Product A using ABC? How much gross profit 5. Which method of product costing gives better information to managers of this company? Explain why 3) Product A, $24.30 per per unit? unit cost is generated by each customer of Product B using ABC? Is the gross profit per customer adequate