Comprehensive Activity-Based Costing Exercise [LO2, LO3, LO4, LO5]

Silicon Optics has supplied the following data for use in its activity-based costing system:

During the year, Silicon Optics completed an order for a special optical switch for a new customer, Indus Telecom. This customer did not order any other products during the year. Data concerning that order follow:

Required:
1. Using Exhibit 7–5 as a guide, prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
2. Using Exhibit 7–6 as a guide, compute the activity rates for the activity cost pools.
3. Prepare a report showing the overhead costs for the order from Indus Telecom, including customer support costs.
4. Using Exhibit 7–11 as a guide, prepare a report showing the customer margin for Indus Telecom.

Transcribed Image Text:

Overhead Costs Wages and salaries.... $350,000 Other overhead costs 200,000 Total overhead costs $550,000