Woodland industries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $13 per hour and that there were no beginning inventories. The following information was available for 2016, based on an expected production level of 52,800 units for the year, which will require 220,000 direct labor hours:

Activity-Cost Driver Budgeted Costs for 2016 Cost Driver Used as Allocation Base Cost Allocation Rate
Materials handling $61,600 Number of parts used $0.28 per part
Cutting and lathe work $2,710,400 Number of parts used $12.32 per part
Assembly and inspection $3,850,000 Direct labor hours $17.50 per hour
The following production, costs and activities occurred during the month of July:

Units Produced Direct Materials Costs Number of Parts Used Direct Labor Hours
3,050 $101,500 508 13,600
Required:

a. Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of July(using the activity-based costing approach). (Round "Cost per unit produced" to 2 decimal places.)

b. Assume instead that Woodland Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activity-based costing system). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of July. (Round "Cost per unit product" to 2 decimal places.)

c. Which approach do you think provides better information for manufacturing managers?

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600