Marco S.A. is a French company that produces and sells 2 products, A and B. It uses 2 raw materials, X and Y for its production.

It is organized in 5 departments: Administration, Maintenance, Purchasing, Production and Sales department. The administration and Maintenance are support departments and the 3 others are considered as operational departments. The Administration department estimates that it works equally for each other department. The Maintenance department spends 80% of its time for the production workshop and 20% for the sales department. The drivers for the operational departments are the following:

• purchasing: X or Y kg purchased
• production: direct labor hours
• sales: finished good units sold

The following data was recorded for last month:

Indirect costs:

• administration: €120,000
• maintenance: 50,000
• purchasing: 50,000
• production: 126,500
• sales department: 66,500

Direct costs:

• material X: 1,000 kg, for a total amount of € 50,300
• material Y: 3,000 kg, for a total amount of €120,750
• direct labor: 22,050 hours, of which 10,250 for the product A and 11,800 for the product B; each hour costs €14.
• sellers’ commissions: 3% of the sales revenue.

Beginning Inventories:

• material X inventory: 300 kg for €20,700
• material Y inventory: 500 kg for € 29,250
• product A inventory: 50 units for € 49,000
• product B inventory: 100 units for €78,800

Ending Inventories:

• material X inventory: 200 kg for €14,000
• material Y inventory: 1,000 kg for € 60,000
• product A inventory: 20 units for € 20,000
• product B inventory: 80 units for €64,000

Materials consumption by the two products:

• by the product A: 500 kg of material X and 1,500 kg of material Y
• by the product B: 600 kg of material X and 1,000 kg of material Y

Volume produced:

• 370 units for the product A
• 480 units for the product B

Sales:

• product A: 400 units x €1,200 = 480,000
• product B: 500 units x €950 = 475,000

Required: Prepare the full cost and the income statement with a FBC approach.

Answer rating: 100% (QA)

Macro SA Cost Sheet Product A Product B Direct Materials Material X 25909 31091 Material Y 54000 36000 Total Direct Materials 79909 67091 Direct Labor ... View the full answer