Blevins Boards produces two kinds of skateboards. Selected unit data for the two boards for the...

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Blevins Boards produces two kinds of skateboards. Selected unit data for the two boards for the...

Blevins Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow:

Blevins allocates production overhead using activity-based costing. It allocates delivery expense and sales commissions, which amount to $54,000 per quarter, to the two products equally.

Required

a. Compute the per-unit cost for each product.

b. Compute the profit for each product.

business accounting

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Answer 1

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Answer #1

	Delivery expense & Sales comission	$54000 per quarter
	Equal distribution indicates $27000 to each product
	Basco boards per unit cost = $27000/5000 = $5.4 per unit
	Shimano boards per unit cost = $27000/10000 = $2.7





		BASCO BOARDS	SHIMANO BOARDS
	Diret material	25	38
	Direct labor	32	54
	Allocated overheads	15	18
	Delivery expense & Sales comission	5.4	2.7

a)	Per unit cost	77.4	112.7
b)	Units sold	5000	10000
c)	Total cost	387000	1127000
d)	Sales revenue	500000	1400000
e)= d-c	Profit for each product per quarter	113000	273000

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Answer 2

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