Question
Solar Salt has determined that its total manufacturing cost of $700,000 is a mixture of unit-level costs, batch-level costs, and product line costs. Solar Salt
Solar Salt has determined that its total manufacturing cost of $700,000 is a mixture of unit-level costs, batch-level costs, and product line costs. Solar Salt has assembled the following information concerning the manufacturing costs and the driver used to allocate the costs in each activity pool (units, batches, and lines respectively).
Retail Products
Total Manufacturing Cost | Agricultural Products | ||
Unit-level costs | $210,000 | 5,000 units | 13,000 units |
Batch-level costs | 280,000 | 50 batches | 80 batches |
Product line costs | 210,000 | 11 lines | 14 lines |
$700,000 |
Revenues for the Agricultural Products totaled $600,000. Revenue for Retail Products totaled $350,000. How much will gross profit in the agriculture division be if Solar Salt adopts an activity-based costing system?
(Please round your answer to the nearest dollar at the end of your answer.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started