Walnut Systems produces two products, Product A, which sells for $121 per unit, and Product...
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Walnut Systems produces two products, Product A, which sells for $121 per unit, and Product B, which sells for $199 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)
$ 155,956
204
304
Machining (Machine Hours)
562,900
1,160
3,170
Inspection (Batches)
23,600
36
23
Walnut manufactures 10,300 units of Product A and 7,000 units of Product B per month. Each unit of Product A uses $48 of direct materials and $19 of direct labor, while each unit of Product B uses $69 of direct materials and $30 of direct labor.
Required:
Calculate the activity rate for design.
Calculate the activity rate for machining.
Calculate the activity rate for inspection.
Determine the indirect costs assigned to Product A.
Determine the indirect costs assigned to Product B.
Determine the manufacturing cost per unit for Product A. Note: Round your answer to 2 decimal places.
Determine the manufacturing cost per unit for Product B. Note: Round your answer to 2 decimal places.
Determine the gross profit per unit for Product A. Note: Round your intermediate calculation to 2 decimal places. Round your answer to 2 decimal places.
Determine the gross profit per unit for Product B
\begin{tabular}{|l|l|} \hline a. Rate for Design & per hour \\ \hline b. Rate for Machining & per hour \\ \hline c. Rate for Inspection & \\ \hline d. Indirect Costs & \\ \hline e. Indirect Costs & per unit \\ \hline f. Manufacturing Cost & per unit \\ \hline g. Manufacturing Cost & per unit \\ \hline h. Gross Profit & per unit \\ \hline i. Gross Profit & per hour \\ \hline \end{tabular}
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