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Apple Inc. uses job costing for its product launches. In December 2033, the company undertakes three projects with the following costs: Project A: Direct labor
Apple Inc. uses job costing for its product launches. In December 2033, the company undertakes three projects with the following costs:
- Project A: Direct labor $1,000,000, Direct materials $600,000, Overhead $400,000
- Project B: Direct labor $1,200,000, Direct materials $700,000, Overhead $450,000
- Project C: Direct labor $1,100,000, Direct materials $650,000, Overhead $425,000
Additional information:
- Overhead is allocated based on activity-based costing with the following cost drivers:
- Project support: 40%, Client meetings: 30%, Research: 30%
Required:
- Calculate the total cost per project using activity-based costing.
- Allocate overhead costs to each project based on the activity-based costing method.
- Analyze the cost structure and profitability of each project.
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