Direct labour cost is $16 per hour. Variable manufacturing support costs are applied on the basis of direct labour hours. This year's variable manufacturing support costs are budgeted at $2,240,000, and direct labour hours are estimated at 448,000. Other manufacturing support is applied at $12 per machine hour. CEB applies a materials handling charge (in other words, materials support costs) of 12% of direct materials cost; this materials handling charge is not included in variable manufacturing support costs.

Ed Welch, CEB's management accountant, believes that before the management group proceeds with the discussion about allocating sales and promotional dollars to individual products, it may be worthwhile to look at these products on the basis of the activities involved in their production. He noticed that the company has been recently selling more of the high-end PC boards than their competitors, yet the profits were still falling.

TV PC

Direct materials $15 $47

Direct labour 10 37

machine hour 1 19

Direct labour cost is $16 per hour. Variable manufacturing support costs are applied on the basis of direct labour hours. This year's variable manufacturing support costs are budgeted at $2,240,000, and direct labour hours are estimated at 448,000. Other manufacturing support is applied at $12 per machine hour. CEB applies a materials handling charge (in other words, materials support costs) of 12% of direct materials cost; this materials handling charge is not included in variable manufacturing support costs.

On the basis of standard costs, calculate the total contribution margin and a contribution margin per product expected in 2020 for CEB Corporation's products: the TV board and the PC board.

On the basis of activity-based costing, calculate the total contribution margin and the contribution margin per unit expected for 2020 for CEB Corporation's two products (7 marks).

Other manufacturing support costs Machine insertion $1,800,000 Number of machine insertions Manual insertion $5,000,000 Number of manual insertions Wave soldering $198,000 Number of boards Total $6,998,000 TV boards PC boards Parts 1 5 47 Machine insertions 10 37 Manual insertions 1 19 Machine setups 2 5 Kilogram of waste 0.04 0.70 Inspections 1 3 4,500,000 2,000,000 165 ,000 Materials support costs Procurement $600,000 Number of parts 3,000,000 Production scheduling $330,000 Number of boards 165,000 Packaging/shipping $660,000 Number of boards 165,000 Total costs $1,590,000 Variable support costs Machine setup $669,000 Number of setups 418,125 Hazardous waste disposal $48,000 Kilogram of waste 8,000 Quality control $560,000 Number of inspections 240,000 General supplies $66,000 Number of boards 165,000 Total costs $1,343,000