Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable.Data as follows: Customer AAA BBB...

Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Data as follows: Customer AAA BBB Component Type A999 B999 Contract Value(GHȼ) 27,000 100,000 Contract Quantity 1,000 unit 2,000 units Material cost/unit GHȼ15 GHȼ20 Moulding time/batch 5 hours 7.5 hours Batch Size 100 units 50 units Annual Budgeted overheads as follows: Activity Cost Driver Cost driver volume/yr Cost pool Moulding Moulding hours 2,000 GHȼ150,000 Inspection Batches 150 GHȼ75,000 Production Management Contracts 20 GHȼ125,000 Required: Calculate the activity based costs and profits for each contract

Extracted text: Question 3 Company XYZ has 2 fixed price contracts for 2 different clients. The company has enough capacity for both contracts but is uncertain whether they will be profitable. Data as follows: Customer AAA BBB A999 B999 Component Type Contract Value(GH¢) Contract Quantity Material cost/unit Moulding time/batch Batch Size 27,000 1,000 unit 100,000 2,000 units GH¢20 GH¢15 5 hours 7.5 hours 100 units 50 units Annual Budgeted overheads as follows: Activity Moulding Inspection Production Cost driver volume/yr 2,000 Cost pool GH¢150,000 Cost Driver Moulding hours Batches 150 GH¢75,000 GH¢125,000 Management Contracts 20 Required: Calculate the activity based costs and profits for each contract