P1 P2 Total

Selling price per unit 100 12

(-) Variable cost per unit 60 3
Contribution margin per unit 40 9
Sales mix 60% 40% 100%
24 3.6

Particulars P1 P2
Selling price 100 12
(-) Variable cost per unit 60 3
Contribution margin per unit 40 9
Contribution margin 1260000 126000
(60 x 21000) (9 x 14000)
(-) Fixed costs 750000 750000
Profit 510000 -624000

P1 P2 Total
Selling price per unit 100 12
(-) Variable cost per unit 60 3
Contribution margin per unit 40 9
Sales mix 70% 30% 100%
28 2.7

bP 24429.96742671

Particulars Product 1 Product 2 210750

28.1
Allocation of overhead under ABC costing
Activity center Budgeted costs Allocation rate Product 1
Machine setups 10,800.00 15:45 2,700.00
Assembly parts 144,600.00 3000:3000 72,300.00
Packaging pieces 55,350.00 500:400 30,750.00
Total overhead costs 105,750.00

July Aug Sept

Budgeted sales 25000 25000 27000
(+) Required inventory 5000 5400 5500
(25000 x 20%) (27000 x 20%) (27500 x 20%)
Total requirement 30000 30400 32500
(-) Beginning inventory 3750 5000 5400
Units required to produce 26250 25400 27100

July Aug Sept

Units required to produce 26250 25400 27100
Material rquired per unit 2.5 2.5 2.5
Production requirement 65625 63500 67750
(+) Required inventory 12500 13500 13750
(5000 x 2.5) (5400 x 2.5) (5500 x 2.5)
Total requirement 78125 77000 81500
(-) Beginning inventory 13125 12500 13500
Total direct material purchases 65000 64500 68000

Work-in-process Finished goods Cost of goods sold

March 5728 3700 8088

Allocation of overhead under traditional costing

Particulars Product 1 Product 2
Machine hour per unit 4 3
Production volume 750 1500
Total machine hours 3000 4500

Overhead rate = Budgeted overhead cost / Budgeted machine hours

Overhead rate = (10800 + 144600 + 55350) / (3000 + 4500) 210750
Overhead rate = $28.1 28.1
Allocated overhead 84300 126450
(3000 x 28.1) (126450 x 28.1)
 32
1.8
22189.35
15
300

126450

84300

Product 2
8,100.00
72,300.00
24,600.00
105,000.00

Quarter
77000
5500

82500
 3750
78750

Quarter
78750 15
2.5 8
196875
13750 27173.91
1350
210625
13125 640
197500

of goods sold