nabled: Midterm 2 Fall 2021 iSavedHelpSubmitIn 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 P Bata selling price of $40 per unit. Additional information relating to the company's only two products is shown below:Product AProduct BTotalDirect materials$ 436,300$ 200,000$ 249,500$ 104,000$ 685,800304,000608,000$ 1,597,800Direct laborManufacturing overheadCost of goods soldThe company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows:ManufacturingActivityActivity Cost Pool (and Activity Measure)Machining (machine-hours)Setups (setup hours)Product design (number of products)Other (organization-sustaining costs)Product A90,00075OverheadTotalProduct B62,500300$ 213,500157,500120,000117,000152,50037512NANANATotal manufacturing overhead cost$608,000The company's ABC implementation team also concluded that $50,000 and $100,000 of the company's advekising expenses could be directly tracedto 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?< Prev21 of 23Next >MacBook AinF12F11F10F9F8

Solution: Manufacturing Overhead 608000 / Estiametd total direct labor dollars 304000…

selling price of $40 per unit. Additional information relating to the company's only two products is shown below: Product A Product B Total $ 436,300 $ 249,500 $ 200,000 $ 104,000 $ 685,800 304,000 608,000 Direct materials Direct labor Manufacturing overhead $ 1,597,800 Cost of goods sold The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows: Manufacturing Activity Product A Product B Total Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Overhead 152,500 375 62,500 $ 213,500 157,500 90,000 75 300 120 000

selling price of $40 per unit. Additional information relating to the company's only two products is shown below: Product A Product B Total $ 436,300 $ 249,500 $ 200,000 $ 104,000 $ 685,800 304,000 608,000 Direct materials Direct labor Manufacturing overhead $ 1,597,800 Cost of goods sold The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows: Manufacturing Activity Product A Product B Total Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Overhead 152,500 375 62,500 $ 213,500 157,500 90,000 75 300 120 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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