1) Using the information provided restate the results by preparing a Schedule of Cost of Goods Manufactured and a separate Income Statement.

2) Customer Jobs: a. Prepare a memo detailing out the similarities and differences between process costing and job order costing.

b. Calculate the predicted total cost and proposed selling price for the customer order using the following separate assumptions. i. Direct Labour Dollars is the cost driver. ii. Machine hours is the cost driver Note: Assume a Gross Margin of 15% in order to determine the proposed selling price.

3) Activity Based Costing a. Prepare a memo identifying and explaining your choices of cost drivers for the following expenses: i. Supervisory costs ii. Inspection costs iii. Factory insurance iv. Factory building amortization

b. Using the concepts of ABC costing, calculate the resulting total cost and gross margins for both the Cosmetic and Food lines.

c. Discuss two advantageous and two disadvantages of implementing ABC costing by PMC.

Results for the year ended August 31, 2020 Cosmetic, Food Total Revenue $12,000,000 $22,000,000 34,000,000 Discount (1,200,000) (2,200,000) (3,400,000) Net Revenue $10,800,000 $19,800,000 $30,600,000 Materials purchased 7,899,802 15,377,198 23,277,000 Accounting and legal 5,000 Utility Costs- Head Office 30,000 Utility Costs- Production 240,000 Administrative salaries 76,000 Inspection Costs 760,000 Factory Insurance 80,000 Sales commissions 340,000 Interest on business credit line 100,000 Management salaries (Omar,Anna, Ted $120,000 each) 360,000 Property Taxes- Head Office 6,500 Factory Building Amortization 412,000 Office supplies, Courier and Postage 7,760 Annual Business Licenses and Fees 2,500 Warranty Program Costs 500,000 Amortization Expense- Fabrication Equipment 650,000 Amortization Expense- Office Equipment 12,000 Business Liability Insurance 10,000 Telephone Costs- Factory 3,000 Telephone Costs- Head Office 6,000 Annas House Rent $15,000, Labour- Assembly workers 2,000,000 3,500,000 5,500,000 Labour- Production supervisors 600,000 Total Expenses 32,992,760 Net Income (Loss) ($2,392,760) Current Year End Balances Cosmetic Food Total Raw Materials $1,500,000 $3,000,000 $4,500,000 Costs- Machines unfinished at year end 1,000,000 3,000,000 4,000,000 Costs- Machines complete but not sold 3,000,000 6,000,000 9,000,000 Last Year End Balances Raw Materials 1,000,000 2,000,000 3,000,000 Costs- Machines unfinished at year end 2,500,000 5,000,000 7,500,000 Costs- Machines complete but not sold $500,000 $1,500,000 $2,000,000.

Actual Results for Fiscal 2020: Cosmetic Food Total Net Revenue in $ $10,800,000 $19,800,000 $30,600,000 Direct Labour Cost in $ $2,000,000 $3,500,000 $5,500,000 # of Assembly Labour Hours 75,000 175,000 250,000 # of Fabrication Machine Hours 200,000 375,000 575,000 # of Machines sold 40 100 140 # of Machines Produced 70 120 190 Inspection Hours 420 2,160 2,580 Factory Area used (sq metres) 11,250 22,800 34,050.

Details of Proposed Customer Order: Direct Materials $226,000, Direct Labour $57,000, Expected # of Fabrication Machine Hours 5,642