Rogers Printing Ltd has contracts to complete weekly supplements required by

Rogers Printing Ltd. has contracts to complete weekly supplements required by its' customers. For the currenRogers Printing decided to evaluate the use of additional cost pools. After analyzing manufacturing overheadManufacturingCost pool overhead costs Activity levelDesign changes $ 125,000 500 design changesSetups 180,000 9,000 setupsInspections 275,000 11,000 inspectionsTotal manufacturing overhead costs $580,000Two customers, Jackson Sports and Beaufort Travel, are expected to use the following printing services:Activity Jackson Sports Beaufort TravelPages 450,000 720,000Design changes 10 0Setups (one per job) 50 12Inspections 40 12Designs (one per job) 50 12Summer 2016 Managerial Accounting for Global Business MLI26C726 Test 2 Practice questions5Pages are a direct cost at $0.02 per page. Design costs per job average $1,500 and $1,700 for Jackson SportsAssume that all costs are variable.Required:Prepare income statements in contribution margin format for both customers using:Cost Poola. Traditional (simple) costing with overhead applied on a page capacity basis Design Ch b. Activity-based costing Setups Inspectio Total POR = 0.04 Jackson sports = 450,000*0.04=$18, 18000 Beaufort Travel = 720,000*0.04 = 28800 Jackson Sports Beaufort Travel Pages Sales $139,500 $103,680 Design ch VC Setups Pages $9,000 $14,400 Manufacturing Overhead Inspectio Design Changes $2,500 $0 Setups $1,000 $240 Inspections $1,000 $480 $0 $0 Designs $75,000 $20,400 Designs (o Total VC $88,500 $35,520 Contribution Margin $51,000 $68,160

5 Total Units 375000 COGS ### Sales 1,781,250 Selling Exp 530,000 Total Cost ^ Expenses 2,480,000 Admin Exp 450,000 Net Loss 698,750 ### Selling Price = 1,781,250/375,000 = 4.75 VC per unit = 975,000/375,000= $2. 2.6 CM per unit = 4.75-2.6 = $2.15 2.15 CM ratio = 2.15/4.75 = 45.3% 0.4526315789 Breakeven point in dollars in 2015 3322295.80573951 New VC = 2,480,000*23% = $570,40 570400 New FC = 2,480,000*77% = $1,909, 1909600 New VC per unit = 570,400/375,000 1.5210666667 New CM per unit = 4.75 - 1.52 = $3. 3.23 New CM ratio = 3.23/4.75 = 68% 0.68 New Breakeven point in 2016 = $1, 2808235.29411765 6 Sales per day 750 Selling price 12 Daily FC 3000 VC per unit 6 Capacity of units per day 800 Average cost per bottle = (3000 + 6 10 Not Accept Accept offer Net income (decrease/increa Revenues $0 $300 $300 Costs $0 $240 ($240) Net Income $0 $60 $60 Daily FC per unit = 10-6 = $4 $4 Not Accept Accept Revenues (per day) $0 $2,250 Costs (per day) $0 $2,800