Answer:
(A) $120,000 ; $136,800
Explanation:
The computation is shown below:
The sales price under GAAP would be
= (Direct materials per boat + Direct labor per boat + Overhead per boat) + (Markup percentage of total cost)
= ($50,000 + $30,000 + $20,000) + 20% × $100,000
= $100,000 + $20,000
= $120,000
The sales price under Internal decision purposes would be
= (Direct materials per boat + Direct labor per boat + Overhead per boat + Upstream costs per boat + downstream cost per boat ) + (Markup percentage of total cost)
= ($50,000 + $30,000 + $20,000 + $10,000 + $4,000) + 20% × $114,000
= $114,000 + $22,800
= $136,800
The upstream per boat would be
= $5,000,000 ÷ 500
= $10,000
And, the downstream per boar
= $2,000,000 ÷ 500
= $4,000
