# Costs and Selling Price Material

Impero

Escana

Driftwood

Set up costs: 12,200

Cost driver: number of set ups.

Total number of set ups: 5

(12,200/5) x 2

= 4,880

(12,200/5) x 2

= 4,880

(12,200/5) x 1

= 2,440

Purchasing and checking wood edging costs: 8,000

Cost driver: wood edging per cabinet

Total number of meter per wood edging: 8 meters

(8,000/8) x 4

= 4,000

(8,000/8) x 4

= 4,000

(8,000/8) x 0

= 0

Purchase of wood costs: 5,100

Cost driver: wood (meters) per cabinet

Total number of meter of wood: 40 meters

(5,100/40) x 15

= 1,912.5

(5,100/40) x 15

= 1,912.5

(5,100/40) x 10

= 1,275

Quality inspection of wood edging costs: 7,400

Cost driver: wood edging (meter) per cabinet

Total number of meter per wood edging: 8 meters

(7,400/8) x 4

= 3,700

(7,400/8) x 4

= 3,700

(7,400/8) x 0

= 0

Dispatch and transport costs: 12,000

Cost driver: number of dispatches

Total number of dispatches: 310

(12,000/310) x 40

= 1,548.3871

(12,000/310) x 120

= 4,645.16129

(12,000/310) x 150

= 5,806.45161

Administration and personnel costs: 27,600

Cost driver: labor hours per cabinet

Total number of labor hours: 120

(27,600/120) x 48

= 11,040

(27,600/120) x 40

= 9,200

(27,600/120) x 32

= 7,360

Total cost per cabinet

27,080.8871/40 units = 677.022178

28,337.6613/120 units =

236.147177

16,881.4516/150 units =

112.543011

Profit per cabinet

Selling price – material cost/cabinet – labor cost/cabinet - cost per cabinet = 780 – 160 - 240 – 677.022178 = - 297.022178 (loss)

Selling price – material cost/cabinet – labor cost/cabinet - cost per cabinet = 570 – 130 – 200 – 236.147177 = 3.852823 (profit) Selling price – material cost/cabinet – labor cost/cabinet - cost per cabinet = 450 – 100 – 160 – 112.543011 = 77.456989 (profit) Total profit for each product

- 297.022178 x 40

= - 11,880.8871

3.852823 x 120 = 462.33876

77.456989 x 150 = 11,618.5484

Total profit for all...

Please join StudyMode to read the full document