CLASSIC PEN COMPANY

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CLASSIC PEN COMPANY
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SUMMARY BACKGROUND

• Produced 2 Pens- Blue Black.
• Started Producing Red and Purple Pens As Well.
• The Profits Started to Decrease With the
  Introduction of 4 Colors.
• All pens produced in one factory.
• Ink is filled in the pens after the colors are
  mixed. This makes machinery to be cleaned during
  transition from one color to another.
• Currently applies overhead on the basis of direct
  labor cost.

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Income Statement
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Activities and Activity Rates
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First Stage Allocation
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First Stage Allocation
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Activity Rates
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Activity Rates
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Second Stage Allocation
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Second Stage Allocation
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Product Costing