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Exercise 17-17 (Algo) Using activity-based costing to allocate overhead, compute profit LO P3 Ice Cool produces two different models of air conditioners. The activities,
Exercise 17-17 (Algo) Using activity-based costing to allocate overhead, compute profit LO P3 Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associat processes follow. Budgeted Activity Process Assembly Activity Machining Setups Budgeted Cost $ 310,200 24,000 Activity Cost Driver Machine hours (MH) Usage 7,600 Setups 120 $ 334,200 Finishing Inspecting $ 226,000 Support Purchasing $ 132,000 Inspections 780 Purchase orders 540 Additional production Information concerning its two models follows. Units and Activities Model X Model Z nces Units produced 1,800 3,600 Machine hours 2,200 5,400 Setups 40 80 Inspections 520 260 Purchase orders 360 180 Per Unit Model X Selling price per unit $ 415 Model Z $ 395 Direct materials cost per unit 150 115 Direct labor cost per unit 130 160 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 3. Compute the total product cost per unit for each model. 4. For each model compute the Required Information [The following information applies to the questions displayed below] Hudson Company reports the following contribution margin Income statement. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales (11,000 units at $300 each) Variable costs (11,000 units at $240 each) Contribution margin Fixed costs Income $ 3,300,000 2,640,000 660,000 360,000 $ 300,000 1. Assume Hudson has a target Income of $158,000. What amount of sales (in dollars) is needed to produce this target income 2. If Hudson achieves its target Income, what is its margin of safety (In percent)? (Round your answer to 1 decimal place.) 1. Amount of sales S 3,300,000 2. Margin of safety 45.5%
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