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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 Standard $ 94 47 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $23 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. 37 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $47 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. Product cost per unit: Standard Deluxe Complete this question by entering your answers in the tabs below. Gross profit per unit: Standard Deluxe Required 1 Required 2 Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $23 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.) Overhead $ $ Direct materials Selling price Which model should the company produce? Deluxe $ 129 52 42 47 $ 52 $ 120 $ $ Direct Labor Product cost Deluxe 37 $ 42 $ 102 117 $ Gross profit Product Cost per unit 102 117 18 $ 23 $ 18

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 Standard $ 94 47 1. Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $23 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. 37 2. Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $47 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. Product cost per unit: Standard Deluxe Complete this question by entering your answers in the tabs below. Gross profit per unit: Standard Deluxe Required 1 Required 2 Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $23 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.) Overhead $ $ Direct materials Selling price Which model should the company produce? Deluxe $ 129 52 42 47 $ 52 $ 120 $ $ Direct Labor Product cost Deluxe 37 $ 42 $ 102 117 $ Gross profit Product Cost per unit 102 117 18 $ 23 $ 18

FINANCIAL ACCOUNTING
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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Wess company... (see pictures)

Required 1 Required 2 Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $47 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. Product cost per unit: Standard Deluxe Gross profit per unit: Standard Deluxe $ $ Direct materials Selling price Which model should the company produce? 47 $ 52 $ Direct labor Product cost 37 42 Overhead Gross profit Product Cost per Unit
Transcribed Image Text:Required 1 Required 2 Using activity-based costing, the company computes overhead cost per unit of $2 for the standard model and $47 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. Product cost per unit: Standard Deluxe Gross profit per unit: Standard Deluxe $ $ Direct materials Selling price Which model should the company produce? 47 $ 52 $ Direct labor Product cost 37 42 Overhead Gross profit 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 $23 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 $47 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. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Standard $ 94 47 37 Product cost per unit: Standard Deluxe Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $23 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.) Gross profit per unit: Standard Deluxe Direct materials $ $ $ Selling price Which model should the company produce? Deluxe $ 129 52 42 47 $ 52 $ 120 $ $ Direct Labor Product cost Deluxe 37 $ 42 $ 102 $ 117 Overhead Gross profit Product Cost per unit 102 117 18 $ 23 $ 18
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 $23 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 $47 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. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Standard $ 94 47 37 Product cost per unit: Standard Deluxe Using a single plantwide rate, the company computes overhead cost per unit of $18 for the standard model and $23 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.) Gross profit per unit: Standard Deluxe Direct materials $ $ $ Selling price Which model should the company produce? Deluxe $ 129 52 42 47 $ 52 $ 120 $ $ Direct Labor Product cost Deluxe 37 $ 42 $ 102 $ 117 Overhead Gross profit Product Cost per unit 102 117 18 $ 23 $ 18
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