P4-45B Use ABC to compute full product costs (Learning Objective 2) Westlake, Ohio, plant. The compan, Russel Furniture manufactures computer desks in its uses activity-based costing to allocate all manufacturing conversion costs(ect labor and manufacturing overhead). Its activitias and related data follow: Cost Allocation Rate S 0.90 $17.00 5.10 Budgeted Cost Activity of Activ Allocation Base Materials handling Assembling Painting 320,000 Number of parts S2,400,000 Direct labor hours s 180,000 Number of painted desks The company produced two styles of desks in March: the Standard desk and the Unpainted desk. Data for each follow Total Direct Costs 595,000 $23,000 Total Assembling Hours 5,900 600 Total Units Materials Tota Nuber Direct Labor Product Standard desk. Unpainted desk Produced 5,500 3,000 of Parts 119,500 29,500 Requirements Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. Premanufacturing activities, such as product design, were assigned to the Standard desks at S4 each and to the Unpainted desks at $3 each. Similar analyses were con- ducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $19 per Unpainted desk. Compute the full product costs per desk. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference. What price should management set for Standard desks to earn a $40 profit per desk? 1. 2. 3. 4