Current Attempt in Progress GoGo Ltd. manufactures three models of children's swing sets: Standard. Deluxe, and Super. The Standard set is made of steel, the Deluxe set is made of aluminum, and the Super set is made of a titanium-aluminum alloy. Because of the different materials used. production requirements differ significantly across models in terms of machine types and time requirements. However, once the parts are produced, assembly time per set is similar for the three models. For this reason, GoGo has adopted the practice of allocating overhead costs on the basis of machine hours. Last year, the company produced 5.000 Standard sets, 500 Deluxe sets, and 2,000 Super sets. The company had the following revenues and expenses for the year: GOGOLTD. Income Statement Year Ended December 31, 2020 Standard Deluxe Super $475,000 $380.000 $560.000 Total $1.415.000 200.000 54.000 150.000 14,000 240.000 24,000 590.000 92.000 ? ? ? 2 ? Sales Direct costs: Direct materials Direct labour Variable overhead costs: Machine set-ups Order processing Warehouse Shipping Contribution margin Fixed overhead costs: Plant administration Other Gross profit ? ? ? ? ? 24.960 59.150 89,300 32.920 526,670 ? ? 89.800 183.940 $252.930 The chief financial officer of GoGo has hired a consultant to recommend cost allocation bases. The consultant has recommended the following: Activity Level Activities Cost Drivers Standard Deluxe Super Total Machine set-ups No. of production runs 22 13 17 52 Sales order processing No. of sales orders received 300 210 335 845 Warehouse costs No. of units held in inventory 200 150 120 470 Shipping No. of units shipped 5,540 550 2.140 8.230 The consultant found no basis for allocating the plant administration and other fixed overhead costs, and recommended that they not be applied to products. Question 5 of 5 -/2 E The consultant found no basis for allocating the plant administration and other fixed overhead costs, and recommended that they not be applied to products. (a) Complete the income statement using the bases recommended by the consultant. Do not allocate any fixed overhead costs. (Round overhead rates to 3 decimal places. e.g. 25.225 and final answers to decimal places, eg. 1525.) GOGOLTD. Income Statement Year Ended December 31, 2020 Standard Deluxe Super Total Sales $475,000 $380,000 $560.000 $1,415.000 Direct costs: Direct 200.000 150.000 240,000 590.000 materials Direct labour 54.000 14,000 24,000 92,000 Variable overhead costs: Machine set- 24.960 ups Order 59,150 processing Warehouse 89,300 32.920 $ $ 526,670 Shipping Contribution margin Fixed overhead costs: Plant administration Other Gross profit 89.800 183.940 $252.930 Save for Later Attempts: 0 of 1 used Submit
