2. Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following data from its activity-based costing system: Overhead Costs Staff Salaries Selling and administration overheads Total Overhead Costs $500,000 200,000 $700,000 Activity Cost Pool Product design Order Processing Customer Support Others Activity Measure Number of new designs Number of Customer orders Number of Customers Organization sustaining activity Total Activity for the Year 500 new designs 700 orders 400 customers Not applicable Distribution of Resource Consumption across Activities Product Order Customer Other Total Design Processing Support Staff Salaries 40% 30% 20% 10% 100% Selling and 30% 10% 20% 40% 100% administration overheads During the year Sunshine Company completed three individual orders for a new customer, Tarpaper Inc. Two different designs of surfboards were prepared for and sold to this new customer - Orange Tangerine and Blue Waves. Data concerning the two designs and customer orders are as follows: Orange Tangerine Blue Waves Selling price $700 per unit $500 per unit Direct materials $280 per unit $180 per unit Direct labor $100 per unit $50 per unit Order 1 Order 2 Order 3 Required: 10 units of Orange Tangerine 20 units of Blue Waves 15 units of Orange Tangerines and 15 units of Blue Waves a. Prepare a report showing the first-stage allocation of overhead costs to the respective activity cost pools. b. Calculate the activity rates for the activity cost pools. c. Prepare a report showing the overhead costs for the orders from Tarpaper Inc. including customer support costs. d. Prepare a report showing the customer margin for Tarpaper Inc. (4 +3 +4 + 4 = 15 Marks)