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 $76 38 28 1. Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 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. Product cost per unit: Standard Deluxe 2. Using activity-based costing, the company computes overhead cost per unit of $4 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. Gross profit per unit: Standard Deluxe Complete this question by entering your answers in the tabs below. $ $ Required 1 Required 2 Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 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.) Deluxe $ 110 Direct materials 43 33 Selling price Which model should the company produce? 38 $ 43 $ Direct Labor Product cost 28 33 Overhead Gross profit Product Cost per unit Prev 2 of 4 BE www Next
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 $76 38 28 1. Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 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. Product cost per unit: Standard Deluxe 2. Using activity-based costing, the company computes overhead cost per unit of $4 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. Gross profit per unit: Standard Deluxe Complete this question by entering your answers in the tabs below. $ $ Required 1 Required 2 Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 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.) Deluxe $ 110 Direct materials 43 33 Selling price Which model should the company produce? 38 $ 43 $ Direct Labor Product cost 28 33 Overhead Gross profit Product Cost per unit Prev 2 of 4 BE www Next
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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Transcribed Image Text:Wess Company has limited capacity and can produce either its standard product or its deluxe product. Additional information follows.
Standard
$76
Per Unit
Selling price
Direct materials
Direct labor
1. Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 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 $4 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
38
28
Complete this question by entering your answers in the tabs below.
Product cost per unit:
Standard
Deluxe
Using a single plantwide rate, the company computes overhead cost per unit of $16 for the standard model and $21 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
$
$
Deluxe
$ 110
43
33
Direct materials
Selling price
Which model should the company produce?
38 $
43
$
Direct Labor
Product cost
28
33
Overhead
Gross profit
Product Cost per unit
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