Dolan Products is a small, family-owned audio component manufacturer. Several years ago, the company decided to concentrate on only three models, which were sold under many brand names to electronic retailers and mass-market discount stores. For internal purposes, the company uses the product names Red, Yellow, and Green to refer to the three components. Data on the three models and selected costs follow. 一 Year 1 Units produced and sold Sales price per unit Direct materials cost per unit Direct labor-hours per unit Wage rate per hour Total manufacturing overhead Yellow 10,000 $155 $ 85 2 $ 12 Red Green Total 6,000 $165 $ 95 3 $ 12 33,000 17,000 $ 95 $ 65 0.5 $ 12 $790,500 This year (year 2), the company only produced the Yellow and Green models. Total overhead was $741,000. All other volumes, unit prices, costs, and direct labor usage were the same as in year 1. The product cost system at Dolan Products allocates manufacturing overhead based on direct labor-hours. Required: a. Compute the product costs and gross margins (revenue less cost of goods sold) for the three products and total gross profit (loss) for year 1. b. Compute the product costs and gross margins (revenue less cost of goods sold) for the two remaining products and total gross profit (loss) for year 2. c. Should Dolan Products drop Yellow for year 3? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the product costs and gross margins (revenue less cost of goods sold) for the two remaining products and total gross profit (loss) for year 2. (Do not round your intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Yellow Green Total (161.00) $ Product cost per unit Gross margin (loss) per unit Total gross profit (loss) (84.00) (60,000.00) s 187,000.00 s 127,000.00 < Required A Required C >

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 16E

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Dolan, Need Assistance with B please

Transcribed Image Text:Dolan Products is a small, family-owned audio component manufacturer. Several years ago, the company decided to concentrate on only three models, which were sold under many brand names to electronic retailers and mass-market discount stores. For internal purposes, the company uses the product names Red, Yellow, and Green to refer to the three components. Data on the three models and selected costs follow. Year 1 Red Yellow Green Total Units produced and sold Sales price per unit Direct materials cost per unit Direct labor-hours per unit Wage rate per hour Total manufacturing overhead 6,000 $165 $ 95 17,000 $ 95 10,000 33,000 $155 $ 85 $65 3 0.5 $ 12 $ 12 $ 12 $790,500 This year (year 2), the company only produced the Yellow and Green models. Total overhead was $741,000. All other volumes, unit prices, costs, and direct labor usage were the same as in year 1. The product cost system at Dolan Products allocates manufacturing overhead based on direct labor-hours. Required: a. Compute the product costs and gross margins (revenue less cost of goods sold) for the three products and total gross profit (loss) for year 1. b. Compute the product costs and gross margins (revenue less cost of goods sold) for the two remaining products and total gross profit (loss) for year 2. c. Should Dolan Products drop Yellow for year 3? Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the product costs and gross margins (revenue less cost of goods sold) for the two remaining products and total gross profit (loss) for year 2. (Do not round your intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Yellow Green Total Product cost per unit 2$ (161.00) $ (84.00) Gross margin (loss) per unit Total gross profit (loss) $ (60,000.00) $ 187,000.00 $ 127,000.00 < Required A Required C >

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