Walnut Systems Produces Two Different Products,Product A,which Sells for $120

question 112

Essay

Walnut Systems produces two different products,Product A,which sells for $120 per unit,and Product B,which sells for $180 per unit,using three different activities: Design,which uses Engineering Hours as an activity driver;Machining,which uses machine hours as an activity driver;and Inspection,which uses number of batches as an activity driver.The cost of each activity and usage of the activity drivers are as follows:
Walnut manufactures 10,000 units of Product A and 7,500 units of Product B per month.Each unit of Product A uses $50 of direct materials and $20 of direct labor,while each unit of Product B uses $75 of direct materials and $35 of direct labor.
Required:
a.Calculate the Design activity proportions for Products A and B.
b.Calculate the Machining activity proportions for Products A and B.
c.Calculate the Inspection activity proportions for Products A and B.
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.
g.Determine the manufacturing cost per unit for Product B.
h.Determine the gross profit per unit for Product A.
i.Determine the gross profit per unit for Product B.

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Definitions:

Taboos

pertains to behaviors or practices that are prohibited or restricted by social or cultural norms, often due to superstition or religious beliefs.

Weakest Norms

The least influential or least enforced rules and standards of behavior within a society or group.

Cultural Relativism

The principle that an individual's beliefs and activities should be understood by others in the context of that individual's own culture.

Folkways

Norms or customary behaviors that are socially approved but not morally significant, dictating appropriate manners and actions in daily routines and interactions.