Question
URGENT NOWWW!!! BONO company produces and sells only two products14,000 units of Product A and 6,000 units of Product B. The selling prices are $65
URGENT NOWWW!!!
BONO company produces and sells only two products14,000 units of Product A and 6,000 units of Product B.
The selling prices are $65 per unit for Product A and $96 per unit for Product B.
Product As direct materials and direct labor costs per unit are $32 and $12, respectively.
Product Bs direct materials and direct labor costs per unit are $34 and $15, respectively.
BONO company is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to 3 cost pools. The following additional information is available for the company as a whole and for Products A and B:
| Activity Cost Pool | Activity Measure | Estimated Overhead Cost | Expected Activity | |
|---|---|---|---|---|
| Machining | Machine-hours | $ 300,000 | 15,000 | MH |
| Machine setups | Number of setups | $ 150,000 | 200 | Setups |
| Product design | Number of products | $ 78,000 | 2 | Products |
| Activity Measure | Product A | Product B |
|---|---|---|
| Machine-hours | 9,000 | 6,000 |
| Number of setups | 50 | 150 |
| Number of products | 1 | 1 |
Using the ABC system, what is the product margin for Product A?
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ACCA Advanced Audit And Assurance
Authors: Nick Blackwell, Annabel Lefton, Emile Woolf International
1st Edition
