nyengka Posts: 1, Reputation: 1 New Member   #1 Feb 6, 2011, 05:06 PM

how to compute product margin? Model X100 sells for $120 per unit whereas Model X200 offers advanced features and sells for $500 per unit. Management expects to sell 50,000 units of Model X100 and 5,000 units of Model X200 next year. The direct material cost per unit is $50 for Model X100 and $220 for Model X200. The company's total manufacturing overhead for the year is expected to be $1,995,000. A unit of Model X100 requires 2 direct labor-hours and a unit of Model X200 requires 5 direct labor-hours. The direct labor wage rate is $20 per hour. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. Using this traditional approach, compute the product margins for X100 and X200.

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