E4-20A Compute activity rates and unit cost (Learning Objective 2)Nano produces skin care products. The company uses an activity-based costing systemand provides the following activity cost pools and cost drivers for the month of July:Activity Cost PoolLabor related .Cost Pool Allocation Rates$6.00 per direct labor hourMachine related .$3.00 per machine hourMachine setup..$50.00 per setupProduction orders.$120 per orderShipments.$80.00 per shipmentGeneral factory.$5.00 per direct labor hour Nano has gathered the cost and activity data for two products: Product A andProduct B. The direct costs and units of production for the two products are as follows:Product AProduct BDirect labor cost per unit.$ 5.00$ 6.20Direct materials cost per unit.$15.00$18.00Number of units produced per month.1,000 units1,100 unitsTotal Expected ActivityProduct AProduct BDirect labor hours. .180 hours190 hoursMachine hours..1,600 hours2,000 hoursMachine setup..3 setups1 setupProduction orders..31Shipments.21General factory..??Requirements1. What is the expected activity for general factory for both Product A and Product B?2. Compute the unit product cost of Product A and Product B.What should the selling price of each product be if the company wishes to have amarkup of 50% on both products?

The question is related to the ABC. The details regarding two products are given.

Answered: E4-20A Compute activity rates and unit…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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