In its first year of operations acompany produced and sold 70,000 units of Product Aata selling price or $20 per un 17.500 units of Product at a selling price of $40 per unit Adoniona information to the company's only two products is shown below Product A Product D Total $ $ Direct materials 436,300 251,700 5 688,000 Direct labor $ 200,000 $100.000 304,00 Manufacturing overhead 600,000 Cost of goods sold 1,600,000 The company created an activity based casting system that allocated its manufacturing overed costs to four active as follows Activity Cost Pool and Activity Measurel Machining (nachine-hours Setups et un Product design (number of products) Other forganization-sustaining costs Total manufacturing overhead cost Manufacturing Activity Overhead Product Product B Total 1 213,500 90.000 62,500 152,500 157, 75 375 120,000 1 2 117,000 NA NA $68,000 The company. ABC lementation som no concuted at 37000 and $2.000 of the companying expertes could be directly traces to Produto Mout, respectively. The owner of teen on valve enes 15400.000 wes organitong nature The comparativ com www router for Moe Choc 1939.200 350.200 309.200 $528.200 In its first year of operations a company produced and sold 70.000 units of Product A at a selling price of $20 per unit and 17.500 units of Product B at a selling price of $40 per unit. Additional information relating to the company's only two products is shown below: Product A Product B Total Direct materials $ 436,300 $ 251,700 $ 688,000 Direct labor $ 200,000 $ 104,000 304,000 Manufacturing overhead 608,000 Cost of goods sold $ 1,600,000 The company created an activity-based costing system that allocated its manufacturing overhead costs to four activities as follows: Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product design (number of products) Other (organization-sustaining costs) Total manufacturing overhead cost Manufacturing Activity Overhead Product A Product B $ 213,500 90,000 62,500 157,500 75 300 120,000 1 117,000 NA NA $ 608,000 Total 152,500 375 2 NA 1 The company's ABC implementation team also concluded that $37.000 and $113,000 of the company's advertising expenses could be directly traced to Product A and Product 8, respectively. The remainder of its selling and administrative expenses ($400,000) was organization-sustaining in nature. The company's activity-based costing system would report a product margin for Product A of
