Wedig diagnostics manufactures two lasers photometer that

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Wedig Diagnostics manufactures two lasers photometer that are used in preparing DNAs. The US model is designed for use in the United States and in the EU model is designed to meet the specifications in most of the European Union. Both models are manufactured in the U.S

The EU models are shipped to Wedig wholly owned European subsidiary, which sells them. All units manufactured are sold. The following table summarizes the selling prices, direct materials and labor, number of units sold.

  • U.S. Model EU Model
  • Selling price/unit $2,500 $2,200
  • Direct material/unit $235 $260
  • Direct labor/unit $560 $500
  • Number of units sold annually 15,000 16,800

The EU units are sold in U.S. dollars. Wedig has total manufacturing overhead of $39 million annually. This overhead is allocated to both U.S. and EU models using total direct labor dollars. Wedig transfers its EU model subsidiary at full cost (direct materials and labor plus allocated overhead).

Reference no: EM13597550

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