Question

JOINT PRODUCT AND ACTIVITY BASED COSTING IN CLASS PROBLEM ASSUMPTIONS: lava ANNİ PRINCIPLES INTERMEDIATE | ADVANCED! TAX 20,000 1@$20 l2@s2に40|3@20 PRODUCT Quantity | TOTALS 15,000 Ink 10,0005,000 1@$1020$1020$10 30$10 1 book per 2 hours per book Labor 10 books 5 books per productivity per hour hour Labor rate $10 pr $10 per hour $10 per $10 per hour Selling price2 multiple Labor hours Machine hours 5,000 2,000 3,000 0,00010,000 25,000 2,0001,000 10,000 ASSUME TOTAL OVERHEAD İS $200,000 I. A.ONE ALLOCATION BASIS-LABOR HOURS Activity Man. - PRINCIPLES INTERMEDIATE ADVANCED TAX Totall Activit Labor $200,000 overhead 2000 3000 0,000 0, B. COMPUTATION OF OVERHEAD COST ON UNIT BASIS Activity Man. PRINCIPLES INTERMEDIATE ADVANCED TAX overhead L Labor $20,0002000 $200,000 000 3000 10,000 000 hours 2. Activity lso,oOpo,00 rate S 3. Allocated ル,000 | 24,000 80,000 0,00 overhead (Line 1X2) 4. Quantity 5. Unit overhead Tota 80 .LoO

Answer 1

1	Calculation of Unit Product Cost, Selling Price and Predetermined Overhead rate
	Product	Principles	Intermediate	Advanced	Tax
	Ink	$20	$40	$60	$80
	Paper	$10	$20	$20	$30
	Labor	$1	$2	$10	$20
	Overhead	$0.80	$1.60	$8.00	$16
	Total Unit Cost	$31.80	$63.60	$98.00	$146.00
	Selling Price multiple	2	3	3	4
	Selling Price	$63.60	$190.80	$294.00	$584.00
	Predetermined Overhead rate	$8	$8	$8	$8
	Working note:
	Labor rate per hour	$10	$10	$10	$10
	Labor productivity per hour	10	5	1	0.5
	Labor cost per unit (Rate/productivity)	$1	$2	$10	$20
2	Cost of Goods Manufactured
	Product	Principles	Intermediate	Advanced	Tax	Total
	Direct Materials:
	Beginning Inventory	0	0	0	0	0
	Add: Purchases					3100000
	Less: Ending Inventory					250000
	Raw Material used	600000	900000	800000	550000	2850000
	Direct Labor	22000	28000	110000	90000	250000
	Applied Overhead	17600	22400	88000	72000	200000
	Total Manufacturing cost	639600	950400	998000	712000	3300000
	Add: Beg WIP	0	0	0	0	0
	Less: Ending WIP	60000	180000	160000	110000	510000
	Cost of Goods Manufactured	579600	770400	838000	602000	2790000
3	Cost of goods sold and gross margin
	Product	Principles	Intermediate	Advanced	Tax	Total
	Sales	$954,000	$1,908,000	$1,470,000	$1,752,000	$6,084,000
						$0
	Beginning Finished goods	0	0	0	0	$0
	Cost of goods manufactured	$579,600	$770,400	$838,000	$602,000	$2,790,000
	Less: Ending finished goods	$95,400	$127,200	$294,000	$146,000	$662,600
	Unadjusted COGS	$484,200	$643,200	$544,000	$456,000	$2,127,400
	Add Under or deduct over overhead					$10,000
	Adjusted COGS					$2,137,400
	Gross Margin					$3,946,600
	Ending WIP is for material only.

Working Note:
Product	Principles	Intermediate	Advanced	Tax
Raw Material used	20000*20+20000*10	(30000*20)+(30000*10)	30000*20)+(20000*10)	20000*20+15000*10
Direct Labor	2200*10	2800*10	11000*10	9000*10
Applied Overhead	2200*8	2800*8	11000*8	9000*8
Ending WIP	(2000*20)+(2000*10)	(6000*20)+(6000*10)	(6000*20)+(4000*10)	"(4000*20)+(3000*10)
Ending finished goods	3000*$31.8	2000*63.60	3000*$98	1000*146