3. OfficeMart has found an error in its data. The percentage of selling and administrative overhead...
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3. OfficeMart has found an error in its data. The percentage of selling and administrative overhead attributable to processing orders should be changed to 25% from 45% and the percentage attributable to supporting customers should be changed to 45% from 25%. 1 Chapter 7: Applying Excel A B C D E 2 3 Data 4 Manufacturing overhead $ 500,000 5 Selling and administrative overhead $ 300,000 6 7 Assembling Processing Supporting Other Units Orders Customers 8 Manufacturing overhead 50% 35% 5% 10% 9 Selling and administrative overhead 10% 25% 45% 20% 10 Total activity 1,000 250 100 units orders customers 11 12 13 OfficeMart orders: 2 13 OfficeMart orders: 14 Customers 15 Orders: 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor 1 customer 14 orders 80 units + $ 595 $ 180 $ 50 (a) Based on new number of orders in Requirement 2, what is the customer margin under activity-based costing when the data are corrected? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) Based on new number of orders in Requirement 2, what is the product margin under the traditional costing system when the data are corrected? (Enter a loss as a negative amount.) Product margin under the traditional costing system 3. OfficeMart has found an error in its data. The percentage of selling and administrative overhead attributable to processing orders should be changed to 25% from 45% and the percentage attributable to supporting customers should be changed to 45% from 25%. 1 Chapter 7: Applying Excel A B C D E 2 3 Data 4 Manufacturing overhead $ 500,000 5 Selling and administrative overhead $ 300,000 6 7 Assembling Processing Supporting Other Units Orders Customers 8 Manufacturing overhead 50% 35% 5% 10% 9 Selling and administrative overhead 10% 25% 45% 20% 10 Total activity 1,000 250 100 units orders customers 11 12 13 OfficeMart orders: 2 13 OfficeMart orders: 14 Customers 15 Orders: 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor 1 customer 14 orders 80 units + $ 595 $ 180 $ 50 (a) Based on new number of orders in Requirement 2, what is the customer margin under activity-based costing when the data are corrected? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) Based on new number of orders in Requirement 2, what is the product margin under the traditional costing system when the data are corrected? (Enter a loss as a negative amount.) Product margin under the traditional costing system
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