Raymond Company produces a variety of bicycles. One of its plants produces two bicycles: a...
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Accounting
Raymond Company produces a variety of bicycles. One of its plants produces two bicycles: a mountain model and a racing model. At the beginning of the year, the following data were prepared for this plant:
In addition, the following information was provided so that overhead costs could be assigned to each product:
Raymond Company uses activity-based costing to calculate product costs.
Required:
A. Calculate the per unit product cost for a mountain bike. B. Calculate the per unit product cost for a racing bike. C. Assume Armstrong Company adds 35% to the cost of a mountain bike and 40% to the
cost of a racing bike obtain the selling prices. Calculate the selling prices for a mountain bike and a racing bike.
Mountain
Racing
Quantity
220,000
125,000
Selling Price
$1,200
$1,000
Unit Prime Cost
$ 400
$ 450
Activity Name
Activity Driver
Activity Cost
Mountain
Racing
Machining
Machine hours
$20,000,000
250,000
250,000
Engineering
Engineering hours
$ 8,000,000
75,000
50,000
Packing
Packing orders
$ 3,500,000
50,000
125,000
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