FINANCE
Required  
1.  Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. (Round your answers to 2 decimal places. Omit the “$” sign in your response.) 
Product A  Product B  
Manufacturing cost per unit  

2.  Assume if the market price for Product A is $20 and the market price for Product B is $60, determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Omit the “$” sign in your response. Input all amounts as positive values.) 
Product A  
Product B  

3.  Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B? (Round your answers to 2 decimal places. Omit the “$” sign in your response.) 
Product A  Product B  
Number of setups required for production  10 setups  12 setups 
Number of parts required  1 part / unit  3 parts / unit 
Inspection hours required  40 hours  210 hours 

Product A  Product B  
Manufacturing cost per unit  

4.1  Determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the “$” sign in your response.) 
Product A  
Product B  

Problem 171A Evaluating product line costs and prices using ABC L.O. P3
[The following information applies to the questions displayed below.]
Healthy Day Company produces two beverages, PowerPunch and SlimLife. Data about these productsfollow. 
PowerPunch  SlimLife  
Production volume  12,500  bottles  180,000  bottles 
Liquid materials  1,400  gallons  37,000  gallons 
Dry materials  620  pounds  12,000  pounds 
Bottles  12,500  bottles  180,000  bottles 
Labels  3  labels per bottle  1  label per bottle 
Machine setups  500  setups  300  setups 
Machine hours  200  MH  3,750  MH 

Additional data from its two production departments follow. 
Department  Driver  Cost  
Mixing department  
Liquid materials  Gallons  $  2,304  
Dry materials  Pounds  6,941  
Utilities  Machine hours  1,422  
Bottling department  
Bottles  Units  $  77,000  
Labeling  Labels per bottle  6,525  
Machine setup  Setups  20,000  

7.
Problem 171A Part 2
2.  What is the cost per bottle for PowerPunch and SlimLife? (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the “$” sign in your response.) 
PowerPunch  SlimLife  
Average cost per bottle  


9.
Problem 171A Part 4
4.  What is the minimum price that the company should set per bottle of SlimLife? 
$0.53 per bottle  
$0.86 per bottle  
$0.36 per bottle 
The price of SlimLife must cover the costs associated with the product, so the minimum price for this product is $0.53 / bottle. 