Heavy-duty Standard

Sales in units 4,000 45,000

Sales price per unit $12,000.00 $9,900.00

Direct material and direct labor costs per unit $3,900.00 $3,100.00

Manufacturing overhead costs per unit $ 1,950.00 $2,350.00

Last year, Beeline purchased an expensive robotics system to
allow for more complex products in the heavy-duty line. The CFO suggested that
an ABC analysis could be valuable to help evaluate a product mix and promotion
strategy for the next salescampaign. She obtained the following ABC information
for 2013:

Activity Cost Driver Cost Total Deluxe Standard

Setups # setups $ 1,200,000 500 410 90

Machine-related #
of machine hours $ 59,800,000 500,000 250,000 250,000

Packing # shipments $ 104,550,000 255,000 45,000 210,000

1. Using the current cost system based on direct labor
hours, what is the estimated total cost of manufacturing one unit for each type
of ventilation machine?

2. Using the current cost system based on direct labor
hours, what is the estimated profit per unit for each type of machine?

3. Using the
activity-based costing data presented above, compute the cost driver rate for
each overhead activity.

4. Compute
the revised manufacturing overhead cost per unit for the heavy-duty machine.

5. Compute
the revised total cost to manufacture one unit of the heavy-duty machine.

6. Compute
the revised profit on one unit of the heavy-duty machine.