The following data are for the two products produced by Tadros Company. Product A Product B
Direct materials $14 per unit $26 per unit
Direct labor hours 0.5 DLH per unit 1.5 DLH per unit
Machine hours 0.4 MH per unit 1.1 MH per unit
Batches 95 batches 190 batches
Volume 10,000 units 2,000 units
Engineering
modifications 11 modifications 55 modifications
Number of customers 500 customers 400 customers
Market price $35 per unit $95 per unit per unit
The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows:
Costs Driver
Indirect Manufacturing
Engineering support $25,500 Engineering modifications
Electricity 24,800 Machine hours
Setup costs 43,000 Batches
Nonmanufacturing
Customer service 72,000 Number of customers
Required:
1.1. Compute the manufacturing cost per unit using the plantwide overhead rate based on direct labor hours.
1.2. What is the gross profit per unit?
2.1. How much gross profit is generated by each customer of Product A and Product B using the plantwide overhead rate?
2.2. What is the cost of providing customer service to each customer?
2.3. Is the gross profit adequate for each customer of Product A and B using the plantwide overhead rate?
3.1. Determine the manufacturing cost per unit of each product line using ABC.
3.2. What is the gross profit per unit?
4.1. How much gross profit is generated by each customer of Product A and Product B using ABC?
4.2. Is the gross profit adequate for each customer of Product A and B using ABC?
5. Which method of product costing gives better information to the managers of this company?
A) Activity-based costing method
B) Departemental overhead rate method
C) Plantwide overhead rate method

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of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.