Question
(9) The manufacturing process at Foxconn is highly automated. Because all hardware devices need software program, product warranty and customer support to give consumers the
(9) The manufacturing process at Foxconn is highly automated. Because all hardware devices need software program, product warranty and customer support to give consumers the best user experience, there are unallocated overhead of $9,876,540 shared by both product lines. Apple uses the ABC cost system to identify value-added activities that have significant joint costs as follows. Using the ABC approach, complete the table above to determine the gross margins of iPhone 6 and iPhone 6 Plus. (Hint: Material costs are mentioned in the article for iPhone 6 and iPhone 6 Plus). Service Personnel iPhone 6 iPhone 6 Plus Estimated Cost Software development 6,250 hours 3,750 hours $6,419,750 Warranty and Support 2,500 hours 2,500 hours $3,456,790 Total iPhone 6 iPhone 6 Plus Unit 25,000 15,000 10,000 @Price $650.00 $750.00 Sales $17,250,000 $9,750,000 $7,500,000 Direct Material $5,155,000 Software $6,419,750 Warranty+Support $3,456,790 COGS $15,031,540 Gross Profit $2,218,460 Sales & Marketing $1,725,000 General Admin $500,000 Net Profit $(6,540) Gross margin (%)
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