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 30% from 45% and the percentage attributable to supporting customers should be changed to 40% from 25%. A B D E 1 Chapter 7: Applying Excel 2 3 Data 4 Manufacturing overhead $ 500,000 5 Selling and administrative overhead $ 300,000 6 7 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity Assembling Processing Units Orders Supporting Customers Other 50% 35% 5% 10% 10% 30% 40% 20% 1,000 250 100 units orders customers 11 12 OfficeMart orders: 13 Customers 1 customer 14 Orders 17 orders 15 Number of filing cabinets ordered in total 80 units 16 17 Selling price $ 595 Direct materials $ 180 18 Direct labor $ 50 19 (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.) 3. OfficeMart has found an error in its data. The percentage of selling and administrative overhead attributable to processing orders should be changed to 30% from 45% and the percentage attributable to supporting customers should be changed to 40% from 25%. A B D E 1 Chapter 7: Applying Excel 2 3 Data 4 Manufacturing overhead $ 500,000 5 Selling and administrative overhead $ 300,000 6 7 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity Assembling Processing Units Orders Supporting Customers Other 50% 35% 5% 10% 10% 30% 40% 20% 1,000 250 100 units orders customers 11 12 OfficeMart orders: 13 Customers 1 customer 14 Orders 17 orders 15 Number of filing cabinets ordered in total 80 units 16 17 Selling price $ 595 Direct materials $ 180 18 Direct labor $ 50 19 (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.)
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