1 Boxes Limited produces collapsible storage boxes. The two most popular styles of storage boxes: Green Large and Blue Medium: Boxes uses an ABC costing system and has the following overhead costs: 4 3 6 7 8 9 The company uses the following activity cost pools and drivers: 10 1 Activity cost pool 2 Assembly 3 Setups Overhead Costs Manufacturing overhead Selling overhead Administrative overhead Total Overhead Machining Customer support Other Number of units Number of setups Machine hours Driver $500,000 $450,000 $240,000 $1,190,000 Manufacturing overhead Selling overhead Administrative overhead Total Activity 5,000 100 10,000 400 Assembly 50% Green Large 1,000 20 5% 30% 4,000 200 Number of customers Not allocated to customers or products Based on an extensive analysis and surveys conducted with all employees, Boxes distributes its overhead to the cost pools as follows: Blue Medium 4,000 80 6,000 200 Setups Machining 15% 20% 5% 10% 20% 15% Customer Support 10% 75% 20% Other 5% 5% 15% Total 100% 100% 100% 39 40 31 2 35 ARRA ARRERRERSER 32 Chapter formulas 24 25 Price and direct costs per unit for last year are as follows: S 36 Required: 37 Part 1: Prepare a report showing first stage allocation of the overhead costs to the activity cost pools. (5 marks) 38 Selling price Direct material Direct labour Green Large ARCUD $300,00 $150.00 $30.00 1. Activity rate= Total cost in cost pool/total activity level 2. Indirect costs applied to cost object = Activity rate x Activity level incurred by cost object chloss Blue Medium $220.00 $40.00 $10.00 Manufacturing overhead Selling overhead Administrative overhead Total overhead costs Part 2: Calculate the activity rates for each cost pool. (4 marks) Note: all cells may not need to be filled. Activity Cost Pool Assembly Assembly Setups Machining Customer Support Other Total 45 Part 2: Calculate the activity rates for each cost pool. (4 marks) Note: all cells may not need to be filled. 949999 46 47 48 50 51 $2 3 Activity Cost Pool Assembly Setups Machining Customer Support Other Part 3: During the past month, 2 customers purchased a total of 150 units of the Medium storage boxes. These orders required a total of 5 setups and 100 machine hours. Compute the product margin using an income statement format. (6 maks) All rows may not be required. Product margin (loss)