Solution-Calculate activity-based costs and profits for

Calculate activity-based costs and profits for each contract

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Reference no: EM132469170

Company XYZ has two fixed price contracts for two different claims. 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

Material cost/unit 1,000 units 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

Question 1: Calculate the activity-based costs and profits for each contract.

Reference no: EM132469170

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Calculate activity-based costs and profits for each contract

Reference no: EM132469170

Reference no: EM132469170

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