2. Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 7. (Prior to completing this requirement, change all worksheet figures back to their original amounts.) 1 Chapter 7: Applying Excel 3 4 5 Data Manufacturing overhead Selling and administrative overhead $ $ 500,000 300,000 Supporting Customers 5% 8 9 10 Manufacturing overhead Selling and administrative overhead Total activity Assembling Units 50% 10% 1,000 units Processing Orders 35% 45% 250 orders Other 10% 20% 25% 100 customers 12 13 OfficeMart orders: 14 Customers 15 Orders 16 Number of filing cabinets ordered in total 17 s Selling price Direct materials _Direct labor 1 customer 7 orders 80 units 595 180 50 19 (a) What is the customer margin under activity-based costing when the number of orders increases to 7? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) What is the product margin under the traditional costing system when the number of orders increases to 7? (Enter a loss as a negative amount.) Product margin under the traditional costing system (c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) U If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease. If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease. 7 ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected. 7 If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected. 2. Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 7. (Prior to completing this requirement, change all worksheet figures back to their original amounts.) 1 Chapter 7: Applying Excel 3 4 5 Data Manufacturing overhead Selling and administrative overhead $ $ 500,000 300,000 Supporting Customers 5% 8 9 10 Manufacturing overhead Selling and administrative overhead Total activity Assembling Units 50% 10% 1,000 units Processing Orders 35% 45% 250 orders Other 10% 20% 25% 100 customers 12 13 OfficeMart orders: 14 Customers 15 Orders 16 Number of filing cabinets ordered in total 17 s Selling price Direct materials _Direct labor 1 customer 7 orders 80 units 595 180 50 19 (a) What is the customer margin under activity-based costing when the number of orders increases to 7? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) What is the product margin under the traditional costing system when the number of orders increases to 7? (Enter a loss as a negative amount.) Product margin under the traditional costing system (c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) U If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease. If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease. 7 ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected. 7 If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected