90.2K

Verified Solution

Link Copied!

Atlanta Systems produces two products, Product A$,$ which sells for $$650$ per unit, and Product B$,$ which sells for $$1,200$ per unit, using three activities: Design, which uses engineering hours as the cost driver; Machining, which uses machine hours as the cost driver; and Inspection, which uses the number of batches as the cost driver. The cost of each activity and usage of the cost drivers are as follows:

Activity Pool $($Driver$)$ Cost of Pool Usage by Product A Usage by Product B

Design $($engineering hours$)$ $ $230,000116134$

Machining $($machine hours$)2,600,0002,3202,680$

Inspection $($batches$)240,0003446$

Atlanta manufactures $12,500$ units of Product A and $10,172$ units of Product B per month. Each unit of Product A uses $$100$ of direct materials and $$45$ of direct labor, while each unit of Product B uses $$140$ of direct materials and $$75$ of direct labor.

Required:

A$.$ Calculate the activity rate for design.

B$.$ Calculate the activity rate for machining.

C$.$ Calculate the activity rate for inspection.

D$.$ Determine the indirect costs assigned to Product A$.$

E$.$ Determine the indirect costs assigned to Product B$.$

F$.$ Determine the manufacturing cost per unit for Product A$.$

Note: Round your answer to the nearest whole dollars.

G$.$Determine the manufacturing cost per unit for Product B$.$

Note: Round your answer to the nearest whole dollars.

H$.$Determine the gross profit per unit for Product A$.$

Note: Round your intermediate calculations and final answer to the nearest whole dollars.

I. Determine the gross profit per unit for Product B$.$

Note: Round your intermediate calculations and final answer to the nearest whole dollars.

Answer & Explanation Solved by verified expert

See Answer