The Accounting Department has provided the following data concerning the proposed new product: HVM Drums Selling...

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The Accounting Department has provided the following data concerning the proposed new product: HVM Drums Selling Price per frame. P 13,112.00 Cost per frame: Direct Materials P 5,420.00 Direct Labor (P69.00 per hour) 1,600.00 Manufacturing Overhead 1,950.00 Total unit manufacturing costs Unit Marketing & Admin Costs Margin per drum P 8,970.00 2,570.00 11,540.00 P 1,572.00 The classic-elite bike frames could be produced with existing equipment and personnel. Manufacturing overhead is allocated to the products based on direct labor hours. Most of the manufacturing overhead consists of fixed common costs such as rent on the factory building, but some of it is variable. The variable manufacturing overhead has been estimated at P 73.75 per drum and P 97.50 per bike frame. The variable manufacturing overhead cost would not be incurred on drums acquired from an outside supplier. Selling and administrative expenses are allocated to the products based on revenues. Almost all of the selling and administrative expenses are fixed common costs, but it has been estimated that variable selling and administrative expenses amount to P 48.70 per drum and P 77.10 per bike frame. All of the firm's employees-direct and indirect-are paid for full 40-hour workweeks and the company has a policy of laying off workers only in major recessions. Required 2. Compute the contribution margin per unit for: a. b. Purchased HVM Drums Manufactured HVM Drums C. Manufactured Classic-Elite Bike Frames The Accounting Department has provided the following data concerning the proposed new product: HVM Drums Selling Price per frame. P 13,112.00 Cost per frame: Direct Materials P 5,420.00 Direct Labor (P69.00 per hour) 1,600.00 Manufacturing Overhead 1,950.00 Total unit manufacturing costs Unit Marketing & Admin Costs Margin per drum P 8,970.00 2,570.00 11,540.00 P 1,572.00 The classic-elite bike frames could be produced with existing equipment and personnel. Manufacturing overhead is allocated to the products based on direct labor hours. Most of the manufacturing overhead consists of fixed common costs such as rent on the factory building, but some of it is variable. The variable manufacturing overhead has been estimated at P 73.75 per drum and P 97.50 per bike frame. The variable manufacturing overhead cost would not be incurred on drums acquired from an outside supplier. Selling and administrative expenses are allocated to the products based on revenues. Almost all of the selling and administrative expenses are fixed common costs, but it has been estimated that variable selling and administrative expenses amount to P 48.70 per drum and P 77.10 per bike frame. All of the firm's employees-direct and indirect-are paid for full 40-hour workweeks and the company has a policy of laying off workers only in major recessions. Required 2. Compute the contribution margin per unit for: a. b. Purchased HVM Drums Manufactured HVM Drums C. Manufactured Classic-Elite Bike Frames