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[10 Marks] Johnson & Smith Company makes custom covers for air conditioning units for homes and businesses. The company uses an activity-based costing system for
[10 Marks] Johnson & Smith Company makes custom covers for air conditioning units for homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity cost pools: Overhead Costs: Production overhead Office expenses Total $100,000 50.000 $150,000 Distribution of Resource Consumption: Activity Cost Pools Making Covers Job Support Other Total Production 40% 42% 18% 100% overhead Office expenses 12% 60% 28% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Annual Activity Making covers 2,500 yards Job support 200 jobs Other Not applicable Required: a) |3 Marks] Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below: CALCULATIONS DO NOT NEED TO BE SHOWN. ONLY THE TABLE WILL BE MARKED. Making Covers Job Support Other Total Production overhead Office expense Total Cost b)/2 Marks] Compute the activity rates (i.c., cost per unit of activity) for the Making Covers and Job Support activity cost pools by filling in the table below: CALCULATIONS DO NOT NEED TO BE SHOWN. ONLY THE TABLE WILL BE MARKED. Making Covers Job Support Production overhead Office expense Total Cost Per Unit of Activity c) | Marks] Prepare a report in GOOD FORM of a job that involves making 50 yards of covers and has direct materials and direct labour cost of $1,500. The sales revenue from this job is $2,500. This report should show the Product Margin for this JOB
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