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Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follow Per Unit Selling price Direct materials Direct labor Standard $ 84 42 32 Deluxe $ 119 47 37 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint Compute product cost per unit and compare that with selling price to get gross profit per unit 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit

Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follow Per Unit Selling price Direct materials Direct labor Standard $ 84 42 32 Deluxe $ 119 47 37 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint Compute product cost per unit and compare that with selling price to get gross profit per unit 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Per Unit Selling price Direct materials Direct labor Required 1 Required 2 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint Compute product cost per unit and compare that with selling price to get gross profit per unit Standard $ 84 42 32 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit Complete this question by entering your answers in the tabs below. Product cost per unit Standard Deluxe Gross profit per unit Standard Deluxe Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. (A negative gross profit should be indicated with a minus sign.) Direct materials S Deluxe $ 119 Selling price 47 37 Which model should the company produce? 42 S 47 S Direct Labor Product cost 32 37 Overhead Gross profit Required 2 > Product Cost per unit
Transcribed Image Text:Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Per Unit Selling price Direct materials Direct labor Required 1 Required 2 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint Compute product cost per unit and compare that with selling price to get gross profit per unit Standard $ 84 42 32 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit Complete this question by entering your answers in the tabs below. Product cost per unit Standard Deluxe Gross profit per unit Standard Deluxe Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit. (A negative gross profit should be indicated with a minus sign.) Direct materials S Deluxe $ 119 Selling price 47 37 Which model should the company produce? 42 S 47 S Direct Labor Product cost 32 37 Overhead Gross profit Required 2 > Product Cost per unit
Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Per Unit Selling price Direct materials Direct labor 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit Standard $ 84 42 32 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit Complete this question by entering your answers in the tabs below. Product cost per unit: Standard Deluxe Required 1 Required 2 Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit. Direct materials Product Cost per Unit Gross profit per unit Standard Deluxe $ S Selling price Deluxe $ 119 47 37 Which model should the company produce? 42 $ Direct labor Product cost < Required 1 32 37 Overhead Gross profit
Transcribed Image Text:Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows. Per Unit Selling price Direct materials Direct labor 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $25 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price to get gross profit per unit Standard $ 84 42 32 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit Complete this question by entering your answers in the tabs below. Product cost per unit: Standard Deluxe Required 1 Required 2 Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $45 for the deluxe model. Which model should the company produce? Hint: Compute product cost per unit and compare that with selling price per unit to get gross profit per unit. Direct materials Product Cost per Unit Gross profit per unit Standard Deluxe $ S Selling price Deluxe $ 119 47 37 Which model should the company produce? 42 $ Direct labor Product cost < Required 1 32 37 Overhead Gross profit
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