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Activity	of Activity		Allocation Base	Allocation Rate
Materials handling. .	$310,000		Number of parts	$0.60
Assembling. . . . . . .	$2,200,000		Direct labor hours	$13.00
Painting. . . . . . . . . . . . .	$150,000		Number of painted desks	$4.90

McKnightMcKnight

produced two styles of desks in? March: the Standard desk and Unpainted desk. Data for each? follow:

	Total	Total Direct	Total	Total Assembling
	Units	Materials	Number	Direct Labor
Product	Produced	Costs	of Parts	Hours
Standard desk. . . . . .	7,000	$139,900	121,500	6,300
Unpainted desk. . . . .	2,000	$28,700	31,500	800

orp. manufactures computer desks in its Austin?, Texas?, plant. The company uses? activity-based costing to allocate all manufacturing conversion costs? (direct labor and manufacturing? overhead). Its activities and related data follow. LOADING...?(Click the icon to view the activity areas and related? data.) Requirements 1. Compute the? per-unit manufacturing product cost of Standard desks and Unpainted desks. 2. Premanufacturing? activities, such as product? design, were assigned to the Standard desks at $ 7 each and to the Unpainted desks at $ 5 each. Similar analyses were conducted of? post-manufacturing activities, such as? distribution, marketing, and customer service. The? post-manufacturing costs were $ 22 per Standard and $ 21 per Unpainted desk. Compute the full product costs per desk. 3. Which product costs are reported in the external financial? statements? Which costs are used for management decision? making? Explain the difference. 4. What price should McKnight's managers set for Standard desks to earn a $ 40 profit per? desk

Requirement 1. Compute the? per-unit manufacturing product cost of Standard desks and Unpainted desks. ?(Complete all input boxes. Enter a? "0" for any zero amounts. Round your answers to the nearest whole? dollar.)

	Standard Desk	Unpainted Desk
Direct materials	139900	28700
Materials handling
Assembling
Painting
Total manufacturing cost
Number of units
Manufacturing cost per unit

Requirement 2. Premanufacturing? activities, such as product? design, were assigned to the Standard desks at

$ 7$7

each and to the Unpainted desks at

$ 5$5

each. Similar analyses were conducted of? post-manufacturing activities such as? distribution, marketing, and customer service. The? post-manufacturing costs were

$ 22$22

per Standard and

$ 21$21

per Unpainted desk. Compute the full product costs per desk.

	Standard Desk	Unpainted Desk
Full product cost per unit

Requirement 3. Which product costs are reported in the external financial? statements? Which costs are used for management decision? making? Explain the difference.

?

Full product costs

Manufacturing product costs

are reported in the financial statements. Managers use

?

full product costs

manufacturing product costs

for decisions such as pricing and product emphasis. Full product costs include the

?

costs of premanufacturing and post-manufacturing activities

direct manufacturing costs only

indirect direct manufacturing costs only

manufacturing costs only

that are expensed as incurred for external reporting.? However, these costs often are

?

assigned to products for internal decisions

ignored for the purposes of internal decision making

.

Requirement 4. What price should

McKnight'sMcKnight's

managers set for Standard desks to earn a

$ 40$40

profit per? desk?

Sales price per unit - standard desk

Choose from any list or enter any number in the input fields a

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