Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity...

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Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Data as follows: Customer AAA вв Component Type A999 B999 Contract Value($) $27,000 $100,000 Contract Quantity 1,000 unit 2,000 units Material cost/unit $15 $20 Moulding time/batch 5 hours 7.5 hours Batch Size 100 units 50 units Annual Budgeted overheads as follows: Activity Cost Driver Cost driver Cost volume/yr pool Moulding Moulding hours 2,000 $150,000 Inspection Batches 150 $75,000 Production Management $125,000 Contracts 20 Required: (a) Calculate the activity based costs and profits for each contract (b) Calculate the profit for each job using Absorption costing. Absorb overheads using moulding hours. Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Data as follows: Customer AAA вв Component Type A999 B999 Contract Value($) $27,000 $100,000 Contract Quantity 1,000 unit 2,000 units Material cost/unit $15 $20 Moulding time/batch 5 hours 7.5 hours Batch Size 100 units 50 units Annual Budgeted overheads as follows: Activity Cost Driver Cost driver Cost volume/yr pool Moulding Moulding hours 2,000 $150,000 Inspection Batches 150 $75,000 Production Management $125,000 Contracts 20 Required: (a) Calculate the activity based costs and profits for each contract (b) Calculate the profit for each job using Absorption costing. Absorb overheads using moulding hours.

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Cost per unit of cost driver Activity Cost Pool Cost Driver Year Cost per Unit of C... View the full answer