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  • Abkaber

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    kingsters bravo
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    The document compares absorption costing and activity-based costing for three products - sunshine, roadster, and fireball. Absorption costing assigns overhead costs based on units produced, resulting in profits of $1.4M, $2.26M, and $520k respectively for each product. Activity-based costing assigns costs based on cost pools and cost drivers, leading to profits of $1.34M, $3.02M, and a loss of $182k under this method. The total profit using activity-based costing is $4.18M.

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    The document compares absorption costing and activity-based costing for three products - sunshine, roadster, and fireball. Absorption costing assigns overhead costs based on units produced, resulting in profits of $1.4M, $2.26M, and $520k respectively for each product. Activity-based costing assigns costs based on cost pools and cost drivers, leading to profits of $1.34M, $3.02M, and a loss of $182k under this method. The total profit using activity-based costing is $4.18M.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Download as xlsx, pdf, or txt
    14 views2 pages

    Abkaber

    Uploaded by

    kingsters bravo
    The document compares absorption costing and activity-based costing for three products - sunshine, roadster, and fireball. Absorption costing assigns overhead costs based on units produced, resulting in profits of $1.4M, $2.26M, and $520k respectively for each product. Activity-based costing assigns costs based on cost pools and cost drivers, leading to profits of $1.34M, $3.02M, and a loss of $182k under this method. The total profit using activity-based costing is $4.18M.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 2

    Absorption Costing:

    sunshine roadster fireball


    UNITS 2,000 1,600 400
    DM 800,000 960,000 360,000
    DL 200,000 220,000 80,000
    DL(at $5 Per Hour) 1,000,000 1,100,000 400,000
    OHDs 4,800,000 5,280,000 1,920,000
    TOTAL 6,600,000 7,340,000 2,680,000
    SELLING PRICE 8,000,000 9,600,000 3,200,000
    P/L 1,400,000 2,260,000 520,000

    ACTIVITY BASED COSTING:

    Cost pools $
    deliveries to retailers 2,400,000
    set up costs 6,000,000
    purchase orders 3,600,000

    Cost drivers
    sunshine roadster fireball
    number of deliveries 100 80 70
    number of set ups 35 40 25
    number of purchases 400 300 100

    Cost Driver Rate


    deliveries to retailers 9,600
    set up costs 60,000
    purchase orders 4,500

    sunshine roadster fireball


    UNITS 2,000 1,600 400
    DM 800,000 960,000 360,000
    DL 200,000 220,000 80,000
    DL(at $5 Per Hour) 1,000,000 1,100,000 400,000
    OHDs 4,860,000 4,518,000 2,622,000
    TOTAL 6,660,000 6,578,000 3,382,000
    SELLING PRICE 8,000,000 9,600,000 3,200,000
    P/L 1,340,000 3,022,000 - 182,000
    TOTAL P/L 4,180,000
    OAR
    12,000,000 = 24
    500,000

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