Eastern Chemical Company produces three products. The operating results of the current year are:ActualPrice$382.00271.60326.00SalesProduct QuantityABC1,8589,258925TargetPrice$ 301.00313.60218.50Direct materialsDirect laborTotal prime costThe firm sets the target price of each product at 150% of the product's total manufacturing cost. It appears that the firm was able to sellProduct Cat a much higher price than the target price of the product and lost money on Product B. Tom Watson, CEO, wants topromote Product C much more aggressively and phase out Product B. He believes that the information suggests that Product C hasthe greatest potential among the firm's three products because the actual selling price of Product C was almost 50% higher than thetarget price, while the firm was forced to sell Product B at a price below the target price.Both the budgeted and actual factory overhead for the current year are $847,300. The actual units sold for each product also are thesame as the budgeted units. The firm uses direct labor dollars to assign manufacturing overhead costs. The direct materials and directlabor costs per unit for each product are:Difference$ 1.00(42.80)$ 107.50Product A$ 66.0836.00$ 182.00Number of setupsWeight of direct materials (pounds)Waste and hazardous disposalsQuality inspectionsUtilities (machine hours)TotalProduct B$ 130.4828.08$158.48The controller noticed that not all products consumed factory overhead similarly. Upon further investigation, she identified thefollowing usage of factory overhead during the year:Product C$ 81.0018.50$ 99.50Product A341641463,780Product B626661518,600Product C436646511,850TotalOverhead$ 8,300283,580462,58091,08082,080$ 847,380Required:1. Determine the manufacturing cost per unit for each of the products using the volume-based method. Complete this question by entering your answers in the tabs below.Required 1 Required 2Determine the manufacturing cost per unit for each of the products using the volume-based method. (Round yourintermediate calculations and final answers to 2 decimal places.)Product BMaterialsLaborOverheadRequired 3Total costProduct AProduct C< Required 1Required 2 >

1) Volume based method :-Predetermined overhead = estimated overhead / Estimated direct labor…

Determine the manufacturing cost per unit for each of the products using the volume-based method. (Round your intermediate calculations and final answers to 2 decimal places.) Product A Product B Product C Materials Labor Overhead Total cost

Determine the manufacturing cost per unit for each of the products using the volume-based method. (Round your intermediate calculations and final answers to 2 decimal places.) Product A Product B Product C Materials Labor Overhead Total cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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