Solution-Calculate the activity-based costs and profits

Calculate the activity-based costs and profits

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Reference no: EM132868061

Question - 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 profitabl.

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 Volume/Year	Cost Pool
Molding	Molding hours	2,000	$150,000
Inspection	Batches	150	$75,000
Production Mgmt	Contracts	20	$125,000

Required - Calculate the activity-based costs and profits for each contract.

Reference no: EM132868061

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Calculate the activity-based costs and profits

Reference no: EM132868061

Reference no: EM132868061

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