2024 – Schedule of Activity Costs Quality Control Activities Activity Cost Process audits 1 935 Training of

Schedule of Activity Costs

 

 Quality Control Activities Activity Cost Process audits $1,935 Training of machine operators 732 Processing returned products 1,029 Scrap process (disposal) 581 Rework 1,169 Preventative maintenance 709 Product design 421 Warranty
work 702 Finished goods inspection 1,603 From the above schedule of activity costs, determine the prevention costs. Select the correct answer. $5,400

 Costello Industries Inc. manufactures only one product. For the year ended December 31,

2014, the contribution margin increased by $16,800 from the planned level of $718,200. The president of Costello Industries Inc. has expressed some concern about such a small increase and has requested a follow-up report. The following data have been gathered
from the accounting records for the year ended December 31, 2014:

 

Actual Planned Difference—Increase (Decrease)

 Sales $1,425,000 $1,402,200 $22,800

 Less: Variable cost of goods sold $540,000 $564,300 $-24,300

 Variable selling and administrative expenses 150,000 119,700 30,300

 Total $690,000 $684,000 $6,000

 Contribution margin $735,000 $718,200 $16,800

Number of units sold 15,000 17,100

Per unit: Sales price $95 $82

Variable cost of goods sold 36 33

 Variable selling and administrative expenses 10 7

Required: Hide

 

1.     Prepare a contribution margin analysis report for the year ended December 31, 2014. Costello Industries Inc. Contribution Margin Analysis For the Year Ended December 31, 2014