You are the new cost accountant for ABX Corporation. After careful review of the company’s operations, you have been tasked to determine the company’s break-even point, the numbers sold to meet the company’s target profit, and the contribution income statement for both outcomes.
Provide the pros and cons for variable, traditional, and activity-based costing methods. After providing each method’s pros and cons, recommend one method for the company’s use and support your discussion.
Company’s Data:
ABX Corporation sold 450,000 units at $75/unit. Fixed costs are $5,300,000 per year. Variable costs are $45 per unit. ABX Corporation desires a target profit of $6,500,000 per year.
