Reference no: EM132568880

Question 1) ASAP is a marketing research company that uses Activity Based Costing. The following budgeted data for each of the activity cost pools is provided for the year 2019:

                                                        Estimated                     Expected Use of

Activity Cost Pools               Overhead                   Cost Drivers per Activity

Market Research                       $ 31,500                900 research hours

Client Meetings                           $1,200,000                6,000 professional hours

Preparing Research Papers            $500,000                         40,000

During 2019 ASAP experienced 5,000 research hours, prepared 15,000 document pages, and 12,000 professional hours.

Instructions

A) Compute the total overhead applied during 2019.

B) How would you know if the overhead was under applied or over applied?

Question 2) Data Inc. developed the following information for its calculator sales:

Sales price $15 per unit

Variable cost of goods sold $4 per unit

Fixed cost of goods sold $50,000

Variable selling expense 10% of sales price

Variable administrative expense $1 per unit

Fixed selling expense $7,000

Fixed administrative expense $5,000

For the year ended December 31, 2019, Data Inc. produced and sold 25,000 calculators.

Instructions

a. CVP income statement using the contribution margin format for Data Inc. for 2019.

b. If the company produced and sold 30,000 calculators, what amount would fixed costs increase by?