Question: Smagula Company Has Two Products: A And B. The Annual Production And Sales Level Of Product A Is 18,188 Units. The Annual Production And Sa


Smagula Company has two products: A and B. The annualproduction and sales level of Product A is 18,188 units. The annualproduction and sales level of Product B is 31,652. The company usesactivity-based costing and has prepared the following analysisshowing the estimated total cost and expected activity for each ofits three activity cost pools. (Note that

the information provided above is the same as thatprovided for the previous question.)

Activity

Cost Pool

Estimated

Cost

Expected Activity

Product A

Product B

Activity 1

$ 80,000

200

800

Activity 2

360,000

600

5,400

Activity 3

58,400

1,000

500

The following information is also available: Sales price perunit $100.00

Direct material per unit 20.00

Direct labor per unit 10.00

Compute the profit margin for Product B usingactivity-based costing.

Leave a comment

Your email address will not be published. Required fields are marked *