Activity Cost Pool Total Cost

Customer deliveries (Number of deliveries) $ 324,000.00

Manual order processing (Number of manual orders) $ 426,000.00
Electronic order processing (Number of electronic orders) $ 375,000.00
Line item picking (Number of line items picked) $ 587,500.00
Other organization-sustaining costs (None) $ 650,000.00
Total $ 2,362,500.00

Total Revenue (when markup is given)

COGS (Cost of Goods Sold) Markup (%)
$ 34,000.00 8%

Customer Margin = Total Rev. - COGS - Overhead Allocated University

Total Revenue $ 36,720.00
COGS $ 34,000.00
Overhead Costs Allocated $ 1,646.50
Customer Margin $ 1,073.50
 Activity Measure Rates
Name of Activity Total Activity Column1 Item Unit of measurement
Number of deliveries 4,000.00 deliveries 81.00 $/deliveries
Number of manual orders 6,000.00 orders 71.00 $/orders
Number of electronic orders 15,000.00 orders 25.00 $/orders
Number of line items picked 470,000.00 line items 1.25 $/line items
-

iven) Total Cost for the period

Total Revenue # of items in the period
$ 36,720.00 Average cost per item in the period

Memorial
$ 36,720.00
$ 34,000.00
$ 5,208.50
$ (2,488.50)
 Total Activity Cost Per Customer Total Activity Cost Per Customer
University Hospital Memorial Hospital
Activity Measure Rate Activity Measure2 Rate3
14.00 $ 1,134.00 26.00 $ 2,106.00
- $ - 40.00 $ 2,840.00
14.00 $ 350.00 - $ -
130.00 $ 162.50 210.00 $ 262.50

$ 1,646.50 $ 5,208.50

$ 240,000.00
15,000.00
$ 16.00 $/item
 Cost of model
M300 M200 Old Machine
$ 369,300.00 $ 326,400.00 $ 377,000.00

Differential Cost $ 42,900.00

Sunk Cost $ 377,000.00
Opportunity Cost $ 369,300.00
 # of cups
Total 1700
Fixed Weekly Expenses $ 1,200.00 $ 1,200.00
Variable Costs $ 0.80 per cup $ 1,360.00
$ 1.506
 # of cups
1800 1900
$ 1,200.00 $ 1,200.00
$ 1,440.00 $ 1,520.00
$ 1.467 $ 1.432
 April
Quantity Price
Beginning Inventory - $ -
Price per Battery 1 $ 70.00
# of bateries purchased 5,850.00 $ 409,500.00
Whithdrew from storeroom 5,400.00 $ 378,000.00
for sales person cars (selling expense) 100.00 $ 7,000.00
batteries used in cars produced by the company 5,300.00 $ 371,000.00
completed cars (finished goods) (90%) 90% 4,770.00 $ 333,900.00
Work In Process 10% 530.00 $ 37,100.00

Unsold vehicled in the month (30% of completed cars) 30% 1,431.00 $ 100,170.00

COGS - Sold Vehicles in the month 70% 3,339.00 $ 233,730.00

Raw Materials (Batteries Purchased - Batteries used

450.00 $ 31,500.00
for the production)
e cost of batteries used in the sales of cars

b
cost of battery in finished goods inv |
everything you priduced but didn't sell
c
d
this is the cost of the leftover
inventory | everything you boughty -
everything used in production
a
 Number of units sold
Selling price per unit
Variable selling expense per unit
Variable administrative expense per unit
Total fixed selling expense
Total fixed administrative expense
Beginning merchandise inventory
Ending merchandise inventory
Merchandise purchases

Traditional Income Statement

Sales
COGS (Beginning Inv + Merchandise Purchased - Closing Inv)
Gross Margin
Sales and Administrative Expenses:
Selling Expenses (Variable Selling Expenses + Fixed Selling Expenses)
Variable Selling Expenses (units * var selling per unit)
Fixed Selling Expenses
Administrative Expenses
 Variable Administrative Expenses (units * var admin expenses per unit)
Fixed Administrative Expenses
Total Selling and Administrative Expenses
Net Operating Income

Contribution Margin Income Statement

Sales
Variable Expenses:
COGS (Beginning Inv + Merchandise Purchased - Closing Inv)
(Variable) Administrative Expenses
(Variable) Selling Expenses
Contribution Margin
Fixed Expenses:
(Fixed) Administrative Expenses
(Fixed) Selling Expenses
Net Operating Income
 Amount
13,000.00 $ 208,000.00
$ 16.00
$ 1.00
$ 1.00
$ 20,000.00
$ 15,000.00
$ 10,000.00
$ 23,000.00
$ 85,000.00

$ 208,000.00
$ 72,000.00
$ 136,000.00

$ 33,000.00
$ 13,000.00
$ 20,000.00
$ 28,000.00
$ 13,000.00
$ 15,000.00
$ 61,000.00
$ 75,000.00

$ 208,000.00

$ 72,000.00
$ 13,000.00
$ 13,000.00 $ 98,000.00
$ 110,000.00

$ 15,000.00
$ 20,000.00 $ 35,000.00
$ 75,000.00
 Amount per Unit 12500 12501
Direct materials $ 7.20 $ 90,000.00 $ 90,007.20
Direct labor $ 4.20 $ 52,500.00 $ 52,504.20
Variable manufacturing overhead $ 1.70 $ 21,250.00 $ 21,251.70
Fixed manufacturing overhead $ 5.20 $ 65,000.00 $ 65,005.20
Fixed selling expense $ 3.70 $ 46,250.00 $ 46,253.70
Fixed administrative expense $ 2.70 $ 33,750.00 $ 33,752.70
Sales commissions $ 1.20 $ 15,000.00 $ 15,001.20
Variable administrative expense $ 0.70 $ 8,750.00 $ 8,750.70
 Product
Flight Dynamic Sure Shot Total
Sales $ 730,000.00 $ 270,000.00 $ 1,000,000.00
CM ratio 63% 74%

Flight Dynamic Sure Shot

Amount % Amount %
Sales $ 730,000.00 100.00% $ 270,000.00 100.00%
Variable Expenses $ 270,100.00 37.00% $ 70,200.00 26.00%
Contribution Margin $ 459,900.00 63.00% $ 199,800.00 74.00%
Fixed Expenses
Net Operating Income

Dollar Sales to Break-even

Fixed Expenses ➗ Overall CM Ratio =
$ 587,500.00 65.97%

Net Operating Income

Increase Sales Overall CM Ratio =
$ 50,000.00 65.97%
 Total Company
Amount %
$ 1,000,000.00 100.00%
$ 340,300.00 34.03%
$ 659,700.00 65.97%
$ 587,500.00
$ 72,200.00

Break even point (Dollars)

$ 890,556.31

Net Operating Income increases by

$ 32,985.00
Selling Price $ 32.00 Selling Price
CM Ratio 30% $ 32.00
Fixed Expenses $ 177,600.00
Plan to sell 20,900.00
Fixed Expenses ➗
$ 177,600.00

Break even in Units

18,500.00
 CM Ratio = Variable Expense per Unit
30% $ 9.60

CM per unit = Break even point in units

$ 9.60 18,500.00

Selling Price = break even in Dollar Sales

$ 32.00 $ 592,000.00
 Total Per Unit
Sales $ 608,000.00 $ 40.00
Variable expenses $ 425,600.00 $ 28.00 1
Contribution margin $ 182,400.00 $ 12.00
Fixed expenses $ 150,000.00
Net operating income $ 32,400.00
Target Profit $ 72,000.00
Sales increase by $ 73,000.00

3-a

3-b
4

5
 Contribution Margin per unit / sales per unit
CM Ratio 30%

Fixed Cost / Contribution Margin per Unit

Break even point in units $ 12,500.00

Fixed Cost / Contribution Margin Ratio

Break even point in sales $ 500,000.00

At breakeven point there is no profit or loss. Sale

At breakeven contribution margin will be equal t
Contribution Margin $ 150,000.00

(Fixed Cost + Target Profit)/Contribution Margin

Units to be sold 18,500.00

Sales (Units to be sold * Selling Price per Unit) $ 740,000.00 40

(Less): Variable Cost (Units to be sold * Var Expenses per Unit) $ 518,000.00
Contribution Margin $ 222,000.00
(Less): Fixed Cost $ 150,000.00
Net Operating Income $ 72,000.00

Sales - Break even sales

Margin of Safety in Dollars $ 108,000.00
(Sales - Break even Sales)/Sales
Margin of Safety in % 17.76%

CM Ratio 30%

Sales * CM Ratio
Net Operating Income Increases by $ 21,900.00
r unit / sales per unit

n Margin per Unit

n Margin Ratio

re is no profit or loss. Sales will be equal to total of variable cost and fixed cost.
on margin will be equal to fixed cost.

fit)/Contribution Margin per unit

Machine-hours required to support estimated production 195,000.00
Fixed manufacturing overhead cost $ 3,510,000.00
Variable manufacturing overhead cost per machine-hour $ 2.00

Job P90
Direct materials $ 1,426.00
Direct labor cost $ 1,023.00
Machine-hours used 78.00
 ( Estimated fixed manufacturing overhead cost / Estimated ma
POHR $ 20.00

Job P90
Direct Materials $ 1,426.00
Direct Labor $ 1,023.00
Overhead Applied (MH used * POHR) $ 1,560.00
Total Manufacturing Cost $ 4,009.00
ing overhead cost / Estimated machine hours ) + Estimated variable manufacturing overhead cost per machine hour
cost per machine hour
Direct Materials $ 6,100.00
Direct Labor $ 8,800.00
Overhead $ 5,808.00

Overhead Expense as % of DL cost

JobW
DM $ 3,700.00
DL $ 4,100.00
Overhead cost of JobW
Overhead / Direct Labor
66%

JobW DL * Overhead Expense as % of DL cost

$ 2,706.00
 Quarter
First Second Third
Direct materials $ 280,000.00 $ 140,000.00 $ 70,000.00
Direct labor $ 160,000.00 $ 80,000.00 $ 40,000.00
Manufacturing overhead $ 240,000.00 $ 216,000.00 $ 204,000.00
Total manufacturing costs (a) $ 680,000.00 $ 436,000.00 $ 314,000.00
Number of units to be produced (b) 120,000.00 60,000.00 30,000.00
Estimated unit product cost (a) ÷ (b) $ 5.67 $ 7.27 $ 10.47
Fourth
$ 210,000.00
$ 120,000.00
?
?
90,000.00
?
Activity Cost Pool Total Cost
Customer deliveries (Number of deliveries) $ 324,000.00
Manual order processing (Number of manual orders) $ 426,000.00
Electronic order processing (Number of electronic orders) $ 375,000.00
Line item picking (Number of line items picked) $ 587,500.00
Other organization-sustaining costs (None) $ 650,000.00
Total $ 2,362,500.00

Total Revenue (when markup is given)

COGS (Cost of Goods Sold) Markup (%)
$ 34,000.00 8%

Customer Margin = Total Rev. - COGS - Overhead Allocated University

Total Revenue $ 36,720.00
COGS $ 34,000.00
Overhead Costs Allocated $ 1,646.50
Customer Margin $ 1,073.50
 Activity Measure Rates
Name of Activity Total Activity Column1 Item Unit of measurement
Number of deliveries 4,000.00 deliveries 81.00 $/deliveries
Number of manual orders 6,000.00 orders 71.00 $/orders
Number of electronic orders 15,000.00 orders 25.00 $/orders
Number of line items picked 470,000.00 line items 1.25 $/line items
-

iven) Total Cost for the period

Total Revenue # of items in the period
$ 36,720.00 Average cost per item in the period

Memorial
$ 36,720.00
$ 34,000.00
$ 5,208.50
$ (2,488.50)
 Total Activity Cost Per Customer Total Activity Cost Per Customer
University Hospital Memorial Hospital
Activity Measure Rate Activity Measure2 Rate3
14.00 $ 1,134.00 26.00 $ 2,106.00
- $ - 40.00 $ 2,840.00
14.00 $ 350.00 - $ -
130.00 $ 162.50 210.00 $ 262.50

$ 1,646.50 $ 5,208.50

$ 240,000.00
15,000.00
$ 16.00 $/item
 Activity Cost Pool Activity Measure Estimated
Overhead Cost
Machine setups No of setups $ 29,250.00
Special processing Machine-hours $ 211,500.00
General factory Organization-sustaining $ 68,800.00

Hubs Sprockets
Direct Labour-hour per unit $ 0.50 $ 0.10
Annual production Units 20,000.00 42,000.00
 Hubs Sprockets
Direct Materials per unit $ 38.00 $ 12.00
Direct Labour $ 10.00 $ 2.00
Overhead $ 11.39 $ 0.31
Unit cost $ 59.39 $ 14.31

Direct Labor wage rate $ 20.00 per hour

Hubs requires special equipment and are more complex than Sprockets

Assign overheads costs to product ( Hubs Sprockets

Machine setups $ 16,250.00 $ 13,000.00
Special processing $ 211,500.00 $ -
$ 227,750.00 $ 13,000.00
 Activity
Activity Rate
Hubs Sprockets Total
130.00 104.00 234.00 $ 125.00
4,700.00 - 4,700.00 $ 45.00
NA NA NA
assign overhead cost each alloc base, each product /units produced