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The total sales from the 10 contracts for local commercials was $220

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The total sales from the 10 contracts for local commercials
was $220,000.
Required:
Determine the cost of serving the local commercial market.
Prepare a report showing the margin earned serving the
local commercial market (remember this company has no
direct materials or direct labor costs.)
Solution
Answer:
Calculation of cost of serving the local commercial market:
Cost Pool
Activity
Rate
Cost
A
B
A*B
Animation concept
22
Proposals
$ 6,000
$ 132,000

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Animation Production
11
Minutes
$ 6,800
$ 74,800
Contract Admn.
9
Contracts
$ 6,500
$ 58,500
Total Cost
$ 265,300
Calculation of Margin
Sales Revenue
$ 220,000
Less: Costs
$ (265,300)
Margin
$ (45,300)
Calculation of cost of serving the local commercial market:
Cost Pool
Activity
Rate
Cost
A

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The total sales from the 10 contracts for local commercials was $220,000. Required: Determine the cost of serving the local commercial market. Prepare a report showing the margin earned serving the local commercial market (remember this company has no direct materials or direct labor costs.) Solution Answer: Calculation of cost of serving the local commercial market: Cost Pool Activity Rate Cost A B A*B Animation concept 22 Proposals $ 6,000 $ 132,000 Animation Production 11 Minutes $ 6,800 $ 74,800 Contract Admn. 9 Contracts $ 6,500 $ 58,500 Total Cost $ 265,300 Calculation of Margin Sales Revenue $ 220,000 Less: Costs $ (265,300) Margin $ (45,300) Calculation of cost of serving the local commercial market: Cost Pool Activity Rate Cost A B A*B Animation concept 22 Proposals $ 6,000 $ 132,000 Animation Production 11 Minutes $ $ 6,800 74,800 Contract Admn. 9 Contracts $ $ 6,500 58,500 Total Cost $ 265,300 Calculation of Margin Sales Revenue $ 220,000 Less: Costs $ (265,300) Margin $ (45,300) Name: Description: ...
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