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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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