Problem: Gerald Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow.
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Basco Boards
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Shimano Boards
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Production costs
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Direct materials
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$24.50
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$37.00
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Direct labor
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$30.50
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$52.00
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Allocated overhead
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$15.20
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$19.00
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Total units produced and sold
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4,500
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8,500
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Total sales revenue
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$389,250
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$1,062,500
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Gerald allocates production using activity-based costing. It allocates delivery expense and sales commissions, which amount to $56,500 per quarter, to the two products equally.
Required:
a. Compute per unit cost for each product.
b. Compute the profit each product.