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Chapter 5 Homework 6 Saved Help Save & Exit Submit Check my work 4 Horten Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Horten made 70,000 tennis racquets and 30,000 badminton racquets). 10 points Direct Cost Direct materials Direct labor Tennis Racquet (TR) Badninton Racquet (BR) eBook Print References $28 per unit 34 per unit $20 per unit 28 per unit Category Unit level Batch level Product level Facility level Total Estimated Cost Cost Driver Amount of Cost Driver 750,000 250,000 150,000 650,000 $1,800,000 Number of inspection hours Number of setups Number of TV commercials Number of machine hours TR:15,000 hours ; BR:10,000 hours TR: 80 setups BR: 45 setups TR: 4: BR: 1 TR: 30,000 hours; BR: 35,000 hours Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment. Required a. Compute the cost per unit for each product. b. If management wants to price badminton racquets 30 percent above cost, what price should the company set? Complete this question by entering your answers in the tabs below