Turtle Incorporated has developed a new and improved widget. The company plans to sell the product through an existing website. Turtle$$s marketing department believes the product will sell for $$120.$ Turtle$$s goal is a $50$ percent profit margin on the widget.

Required:

If current prototypes cost $$61\mathrm{.}50$ to produce, will Turtle meet its profit goal?

Calculate the target cost necessary for Turtle to earn $50$ percent profit.

Required information

E$4-3,$ E$4-4$ and E$4-5$

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Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows:

Activity Pools Total Cost of Pool Cost Driver Estimated Cost Driver

Machining $ $328,400$ Number of machine hours $82,100$

Designing costs $76,725$ Number of design hours $8,250$

Setup costs $74,516$ Number of batches $520$

E$4-4($Algo$)$ Assigning Costs Using Activity Rates $[$LO $4-4]$

Suppose that Gable Company manufactures three products, A$,$ B$,$ and C$.$ Information about these products follows:

Product A Product B Product C

Number of machine hours $31,00041,00010,100$

Number of design hours $3,3001,8503,100$

Number of batches $60180280$

Required:

Using activity rates, determine the amount of overhead assigned to each product.

Note: Do not round intermediate calculations. Round the final answer to nearest whole number.