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Contribution Margin Analysis by Model

1) The document shows overhead costs of $1,681,890 which were allocated to machine hours of 7,620, resulting in an overhead rate of $220.72 per machine hour. 2) It further breaks down the overhead costs and allocation across two machine models. Model 145 was allocated $501,034 of overhead based on 2,270 machine hours and Model 212 was allocated $1,180,852 of overhead based on 5,350 machine hours. 3) A comparison of manufacturing costs and market prices is made for the two models, showing Model 145 generates a profit of $213.41 per unit while Model 212 generates a profit of $58.84 per unit.

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AndrewVaz
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7 views4 pages

Contribution Margin Analysis by Model

1) The document shows overhead costs of $1,681,890 which were allocated to machine hours of 7,620, resulting in an overhead rate of $220.72 per machine hour. 2) It further breaks down the overhead costs and allocation across two machine models. Model 145 was allocated $501,034 of overhead based on 2,270 machine hours and Model 212 was allocated $1,180,852 of overhead based on 5,350 machine hours. 3) A comparison of manufacturing costs and market prices is made for the two models, showing Model 145 generates a profit of $213.41 per unit while Model 212 generates a profit of $58.84 per unit.

Uploaded by

AndrewVaz
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

1)

overhead costs 1681890 220.72 per machine hour


machine hours 7620
total
2)
overhead plantwide OH
assigned activity driver rate t
overhead costs machine hours
984000 2270
471600 5350
226290 total 7620
1681890
1)
overhead costs 1681890 220.72 per machine hour
machine hours 7620
total
2)

overhead plantwide OH units OH


assigned activity driver rate total OH cost produced cost /unit
model 145 2270 220.72 501034.4 2100 238.59
model 212 5350 220.72 1180852 4200 281.16

total manufacturing cost/unit model 145 model 212


materials and labour 290 150
overhead 238.59 281.16
total manufacturing cost 528.59 431.16

3) model 145 model 212


market price 742 490
manufacturing cost/unit 528.59 431.16
profit (loss) per unit 213.41 58.84
overhead costs machine hours
984000 2270
471600 5350
226290 total 7620
1681890

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