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A company sells two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of
A company sells two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of its three activities. Activity Cost Driver Square feet Standard Budgeted Activity Usage Deluxe Total 3,000 300 2,500 2,800 200 5,250 5,800 500 7,750 Activity Factory services Setup Quality control Budgeted Cost $ 116,000 $ 12,500 $ 131,750 Setups Units inspected Compute an activity rate for each activity using activity-based costing. Activity Factory services $ Budgeted Cost 116,000 Budgeted Activity Usage Setup 12,500 Quality control 131,750 Activity Rate Zhao Company has fixed costs of $255,000. Its single product sells for $157 per unit, and variable costs are $107 per unit. The company reports sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31. Sales ZHAO Company Contribution Margin Income Statement For Year Ended December 31 0 $ 0
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