Annual manufacturing cost data (1000s) for four product lines are as follows:

Data

Line 1

Line 2

Line 3

Line 4

Annual production

4000

2500

9800

675

Cost of direct materials

$800

$650

$1200

$2500

Cost of direct labor

$3500

$3750

$600

$320

Rank the product lines from lowest to highest in terms of manufacturing cost per unit. Total indirect costs of $10,8 million are allocated based on total direct cost. (Please show work)

1st rank Line 3

2nd rank Line 1

3rd rank  Line 2

4th rank Line 4

Explanation:

Using a spreadsheet approach all of the costs information can be set in excel such that it starts with costs of direct materials followed by the cost of direct labor with summing up to be prime costs of production.

However,the total indirect is then apportioned to the product in proportion of the product's total direct costs(the prime costs) as done in the attached spreadsheet.

The manufacturing cost per unit is the total manufacturing costs divided by annual production in each case.

Find attached.

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