Bassanova Company has two products: A and B. The annual production and sales level of Product A is 18,000 units. The annual production and sales level of Product B is 32,000. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools:
Expected Activity
- Activity Cost Pool Estimaied cost Activity ProductA Product B TotalActivity
- Cutting $ 80,000 200 800 1,000
- Sanding 360,000 600 5,400 6,000
- Painting 60,000 1000 500 1,500
The following information is also available:
- (In Dollars) A B
- Sales price per unit $100.00 150.00
- Direct material per unit 20.00 30.00
- Direct labor per unit 10.00 15.00
Compute the profit margin for Products A and B using activity-based costing.