In its first year of operations a company produced and sold 70,000 units of Product A at a selling price of $20 per unit and 17,500 units of Product B at a selling price of $40 per unit. Additional information relating to the company’s only two products is shown below:     Product A Product B Total Direct materials $ 436,300 $ 249,000 $ 685,300 Direct labor $ 200,000 $ 104,000 304,000 Manufacturing overhead     608,000 Cost of goods sold     $ 1,597,300   The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows:   Activity Cost Pool (and Activity Measure) Manufacturing Overhead Activity Product A Product B Total Machining (machine-hours) $ 213,500 90,000 62,500 152,500 Setups (setup hours) 157,500 75 300 375 Product design (number of products) 120,000 1 1 2 Other (organization-sustaining costs) 117,000 NA NA NA Total manufacturing overhead cost $ 608,000       The company’s ABC implementation team also concluded that $50,000 and $100,000 of the company’s advertising expenses could be directly traced to Product A and Product B, respectively. The remainder of its selling and administrative expenses ($400,000) was organization-sustaining in nature. If the company uses a traditional cost system that relies on plantwide overhead allocation based on direct labor dollars, what is the total gross margin (or product margin) earned by Product B?   Multiple Choice   $159,000   $139,000   $36,300   $59,000

ABC Inc. incurred the following costs for the last 3 months: Production in units: 40,000 50,000 60,000 Factory rent: $ 10,000 $ 10,000 $ 10,000 Indirect Manufacturing costs: $ 50,000 $ 60,000 $ 70,000 Selling costs: $ 60,000 $ 75,000 $ 90,000 Commissions: $ 120,000 $ 150,000 $ 180,000 Assuming that ABC was to produce and sell 80,000 units next month, how much would the company incur in selling costs?

Mahoko PLC's planned production for the year just ended was 18,400 units. This production level was achieved, and 21,200 units were sold. Other data follow: Direct material used $ 552,000   Direct labor incurred 259,440   Fixed manufacturing overhead 390,080   Variable manufacturing overhead 198,720   Fixed selling and administrative expenses 329,360   Variable selling and administrative expenses 100,280   Finished-goods inventory, January 1 3,500 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Mahoko PLC’s finished-goods inventory cost on December 31 under the variable-costing method? Note: Do not round intermediate calculations. 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount?

Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: $ 27 $ 11 $ 6 $ 5 Fixed manufacturing overhead Fixed selling and administrative expenses $ 320,000 $ 60,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is $55 per unit. Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 2. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 3. Reconcile the difference between…