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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
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
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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