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PROBLEM #3 Sanplex Company produces a variety of electronic products. One of its plants produces two laser printers, the Super and the Regular. At the beginning of the year, the following data were prepared for these products. Vtem Super Printer Regular Printer Units produced 50,000 400,000 Sales price per unit $475.00 $295.00 Direct materials cost per unit $30.00 |$25.00 Direct labor cost per unit S130.00 S85.00 Factory overhead costs per unit $100.00 $100.00 Factory overhead costs per unit were determined using a plant-wide rate based on direct labor hours. The marketing manager is impressed with the per unit profitability of the Super Printer, and suggested the company should place more emphasis on producing and selling this product. The plant manager disagreed, arguing the factory overhead costs per unit for the Super Printer are understated To investigate the plant manager's claims, the company hired a consulting firm to gather data to implement activity- based costing. The following data were obtained. 200 setups Overhead activity Setup costs Machine costs Engineering costs Packing costs Activity driver Activity Usage: Super Usage: Regular Cost Printer Printer Number of setups $850,000 100 setups Machine hours $30,000,000 100,000 machine 400,000 machine hours hours Engineering $6,930,000 45,000 120,000 hours engineering hours engineering hours Number of orders $5,000,000 50,000 orders 200,000 orders Required: Answer the questions below and show all computations. Answers requiring dollar amounts should be rounded to the nearest cent. Use one decimal place for answers requiring a percentage. 1. Refer to the first data table. Determine gross profit per unit and gross profit percentage for both the Super Printer and the Regular Printer, with factory overhead allocated using a plant-wide rate based on direct labor hours. 2. Refer to the second data table. Calculate the activity rate for each overhead activity. 3. Allocate overhead costs to both the Super Printer and the Regular Printer, based on overhead activity usage. 4. Determine gross profit per unit and gross profit percentage for both the Super Printer and the Regular Printer, with factory overhead allocated using activity- based costing. Use the amounts for direct materials and direct labor costs per unit from the first data table. 5. Given the revised profitability for each product determined using activity-based costing, evaluate the marketing manager's suggestion to emphasize producing and selling the Super Printer

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