1.

Conventional Cost Approach

Cost/Unit TV Boards Cost/Unit PC Boards
Sales 150.00 9,750,000.00 300.00 12,000,000.00
Cost/unit
Direct Materials 80.00 5,200,000.00 140.00 5,600,000.00
Direct Labor 21.00 1,365,000.00 56.00 2,240,000.00
Machine Time 5.00 325,000.00 15.00 600,000.00
Variable FOH 6.00 390,000.00 16.00 640,000.00
Materials Handling Cost 8.00 520,000.00 14.00 560,000.00
Total Production Cost 120.00 241.00
Contribution Margin 30.00 1,950,000.00 59.00 2,360,000.00

2. Activity-based Costing

Budgeted Costs Amount Cost Driver Activity Cost Driver/Unit

MATERIALS OH
Procurement 400,000.00 No. of parts 4,000,000 0.1
Production Scheduling 220,000.00 No. of Boards 110,000 2
Packaging and Shipping 440,000.00 No. of Boards 110,000 4
1,060,000.00
VARIABLE OH
Machine Setup 446,000.00 No. of setups 278,750 1.6
Hazardous waste disposal 48,000.00 Pounds of waste 16,000 3
Quality control 560,000.00 No. of inspections 160,000 3.5
General supplies 66,000.00 No. of boards 110,000 0.6
1,120,000.00
MANUFATURING OH
Machine insertion 1,200,000.00 No. of parts 3,000,000 0.4
Manual insertion 4,000,000.00 No. of parts 1,000,000 4
Wave Soldering 132,000.00 No. of boards 110,000 1.2
5,332,000.00

Cost/Unit TV Boards Cost/Unit PC Boards

Sales 150.00 9,750,000.00 300.00 12,000,000.00
Direct Materials 80.00 5,200,000.00 140.00 5,600,000.00
Materials OH:
Procurement 2.50 162,500.00 5.50 220,000.00
Production Scheduling 2.00 130,000.00 2.00 80,000.00
Packaging and Shipping 4.00 260,000.00 4.00 160,000.00
VARIABLE OH
Machine Setup 3.20 208,000.00 4.80 192,000.00
Hazardous waste disposal 0.06 3,900.00 1.05 42,000.00
Quality control 3.50 227,500.00 7.00 280,000.00
General supplies 0.60 39,000.00 0.60 24,000.00
MANUFATURING OH
Machine insertion 9.60 624,000.00 14.00 560,000.00
Manual insertion 4.00 260,000.00 80.00 3,200,000.00
Wave Soldering 1.20 78,000.00 1.20 48,000.00
Total Production Cost 110.66 260.15
Contribution Margin 39.34 2,557,100.00 39.85 1,594,000.00