Fantasmas Incorporated had the following information: ? Activity Driver_________
ID: 2536195 • Letter: F
Question
Fantasmas Incorporated had the following information: ?
Activity Driver______________ Unit Variable Cost_____________ Level of Activity Driver
Units sold_______________________ $ 20___________________________ --
Setups _______________________ 1,200_________________________ 60
Engineering hours ________________ 52_________________________ 1,500
Other data:
Total fixed costs (traditional)_______ $600,000
Total fixed costs (ABC) __________ $360,000
Unit selling price __________________$ 60 ?
How many units need to be sold to produce a before-tax profit of $80,000 using ABC?
Explanation / Answer
Units to be sold to produce a before-tax profit of $80,000 using ABC:
= [$360,000 + ($1,200 × 60) + ($52 × 1,500) + $80,000)] / ($60 - $20)
= 14,750 units
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