Question
In: Accounting
Company XYZ has two fixed price contracts for two different clients. The company has enough capacity...
Company XYZ has two fixed price contracts for two different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable.
Data as follows:
Customer AAA BBB
Component Type A999 B999
Contract Value($) $27,000 $100,000
Contract Quantity 1,000 unit 2,000 units
Material cost/unit $15 $20
Molding time/batch 5 hours 7.5 hours
Batch Size 100 units 50 units
Annual Budgeted overheads as follows:
Activity Cost Driver Cost driver Cost
volume/year pool
Molding Molding hours 2,000 $150,000
Inspection Batches 150 $75,000
Production Mgmt Contracts 20 $125,000
Calculate the activity-based costs and profits for each contract.
Company XYZ has two fixed price contracts for two different
clients. The company has enough capacity for both contracts but is
uncertain whether they will be profitable.
Data as follows:
Customer AAA BBB
Component Type A999 B999
Contract Value($) $27,000 $100,000
Contract Quantity 1,000 unit 2,000 units
Material cost/unit $15 $20
Molding time/batch 5 hours 7.5 hours
Batch Size 100 units 50 units
Annual Budgeted overheads as follows:
Activity Cost Driver Cost driver Cost
volume/year pool
Molding Molding hours 2,000 $150,000
Inspection Batches 150 $75,000
Production Mgmt Contracts 20 $125,000
Calculate the activity-based costs and profits for each
contract.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Company XYZ has two fixed price contracts for two different clients. The company has enough capacity...
Company XYZ has two fixed price contracts for two different
clients. The company has enough capacity for both contracts but is
uncertain whether they will be profitable.
Data as follows:
Customer AAA BBB
Component
Type A999 B999
Contract
Value($) $27,000 $100,000
Contract
Quantity 1,000
unit 2,000
units
Material
cost/unit $15 $20
Molding
time/batch 5
hours 7.5
hours
Batch
Size 100
units 50
units
Annual Budgeted overheads as follows:
Activity Cost
Driver Cost
driver Cost
volume/year pool
Molding Molding
hours 2,000 $150,000
Inspection Batches 150 $75,000
Production
Mgmt Contracts 20 $125,000
Calculate the activity-based costs and profits for each
contract.
Company XYZ has two fixed price contracts for two different clients. The company has enough capacity...
Company XYZ has two fixed price contracts for two different
clients. The company has enough capacity for both contracts but is
uncertain whether they will be profitable.
Data as follows:
Customer AAA BBB
Component Type A999 B999
Contract Value($) $27,000 $100,000
Contract Quantity 1,000 unit 2,000 units
Material cost/unit $15 $20
Molding time/batch 5 hours 7.5 hours
Batch Size 100 units 50 units
Annual Budgeted overheads as follows:
Activity Cost Driver Cost driver Cost
volume/year pool
Molding Molding hours...
Company XYZ has two fixed price contracts for two different clients. The company has enough capacity...
Company XYZ has two fixed price contracts for two different
clients. The company has enough capacity for both contracts but is
uncertain whether they will be profitable.
Data as follows:
Customer AAA BBB
Component
Type A999 B999
Contract
Value($) $27,000 $100,000
Contract
Quantity 1,000
unit 2,000
units
Material
cost/unit $15 $20
Molding
time/batch 5
hours 7.5
hours
Batch
Size 100
units 50
units
Annual Budgeted overheads as follows:
Activity Cost
Driver Cost
driver Cost
volume/year pool
Molding Molding
hours 2,000 $150,000
Inspection Batches 150 $75,000
Production
Mgmt Contracts 20 $125,000
Calculate the activity-based costs and profits for each
contract.
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2
3
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3,500,000
Billings
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5,000,000
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b.
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B
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C
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