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In 1990 Bridgeton Industries produced three products at its Automotive Component & Fabrication (ACF) Plant: Fuel Tanks, Manifolds, and Doors. Use the information below to respond to the following:

A.Complete the 1990 pro-forma by-product income statement, given the existing cost system in the case.

B. For each product, calculate the budgeted sales price per unit, full-absorption cost per unit, contribution margin (revenues minus variable costs) per unit, and profit per-unit.

C. Assuming no other changes, evaluate the following statement about Bridgetons cost system: We should switch to machine hours as our cost driver for factory overhead to reduce RUCAG.

D.Calculate the percentage of each activity driver in the Activity Analysis Table that each cost object consumes. Using the results, determine the number of indirect cost pools you think is needed for a multiple-allocation-base system.

E. Calculate the reported unit cost for each product using a multiple-allocation-base cost approach. Identify all important components of your system (cost pools, cost objects, cost drivers, etc.) and explain the design choices (e.g., number of cost pools, cost drivers) that you make.

1990 Pro-Forma Income Statement, by Product

Bridgeton Industries Automotive Component & Fabrication Plant

	Fuel Tanks		Manifolds		Doors
Revenues		$83,535		$93,120		$49,887
Direct labor	4,599		6,540		2,963
Direct materials	16,996		35,725		16,825
Factory overhead*
Cost of Goods Sold
Gross Margin

*Allocated based on budgeted direct labor dollars.

Other 1990 Information

	Fuel Tanks	Manifolds	Doors
Units budgeted, produced, and sold	5,427	7,532	10,420
Machine hours per unit	0.60	0.62	0.20

Available machine hours: 15,000

Activity Analysis Data

Activity	Driver	Consumption by			Total Activity Cost
		Fuel Tanks	Manifolds	Doors
Run machines	Machine hours				$21,153
Maintenance	Maintenance hours	163.1	231.9	105.1	10,000
Quality control	Number of rejects	45	25	5	5,670
Set up	Set up hours	32.6	46.4	21.0	2,710
Supply material	Receipts	72	98	130	3,040
Pack and ship	Shipments	55	75	100	1,565
Plant safety	% of revenues				7,130
Provide personnel	Direct labor dollars				9,435
Provide facilities	Square feet	20,000	10,000	50,000	18,680
Total Indirect Costs					$79,383

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