FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The following data pertain to Montrose Company's three products:
Unit sales per month
Selling price per unit
Variable costs per unit
Unit contribution margin
Batches
Setups
Direct fixed costs
Advertising
Supervision
Common fixed costs
Inspecting products
Materials handling
Customer service
Plant depreciation
General administration
Inspecting products
Materials handling
Customer service
M
9,000
Plant depreciation
General administration
$6.00
3.00
$3.00
5
6
$3,000
5,000
$10,000
4,000
5,000
6,000
8,000
N
14,000
$11.25.
9.00
$ 2.25
10.
3
When Montrose converted to ABC to help assess relevant decision making, it discovered the followin
20% of the inspection activity was unused. The
inspections used were based on the number of
batches produced.
8,000
$7.50
7.00
$0.50
$2,000 $1,000
5,000
5,000
The product margin for Product M using ABC would be
O 50.000
5
1
Facility-level cost
Facility-level cost
10% of the materials handling activity was unused.
The materials handling activity used was based on
the number of production runs.
50% of the customer service activity was unused.
The usage was given as follows: M 1,000, N 1000, O
500
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Transcribed Image Text:The following data pertain to Montrose Company's three products: Unit sales per month Selling price per unit Variable costs per unit Unit contribution margin Batches Setups Direct fixed costs Advertising Supervision Common fixed costs Inspecting products Materials handling Customer service Plant depreciation General administration Inspecting products Materials handling Customer service M 9,000 Plant depreciation General administration $6.00 3.00 $3.00 5 6 $3,000 5,000 $10,000 4,000 5,000 6,000 8,000 N 14,000 $11.25. 9.00 $ 2.25 10. 3 When Montrose converted to ABC to help assess relevant decision making, it discovered the followin 20% of the inspection activity was unused. The inspections used were based on the number of batches produced. 8,000 $7.50 7.00 $0.50 $2,000 $1,000 5,000 5,000 The product margin for Product M using ABC would be O 50.000 5 1 Facility-level cost Facility-level cost 10% of the materials handling activity was unused. The materials handling activity used was based on the number of production runs. 50% of the customer service activity was unused. The usage was given as follows: M 1,000, N 1000, O 500
The product margin for Product M using ABC would be
O
a. $9,000.
Ob. $19,000.
Oc. $13,840.
Od. $27,000.
expand button
Transcribed Image Text:The product margin for Product M using ABC would be O a. $9,000. Ob. $19,000. Oc. $13,840. Od. $27,000.
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