Question
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries $ 300,000 Other overhead costs 100,000 Total
Advanced Products Corporation has supplied the following data from its activity-based costing system:
Overhead Costs | |||
Wages and salaries | $ | 300,000 | |
Other overhead costs | 100,000 | ||
Total overhead costs | $ | 400,000 | |
Activity Cost Pool | Activity Measure | Total Activity for the Year | ||
Supporting direct labor | Number of direct labor-hours | 20,000 | DLHs | |
Order processing | Number of customer orders | 400 | orders | |
Customer support | Number of customers | 200 | customers | |
Other | This is an organization- sustaining activity | Not applicable | ||
Distribution of Resource Consumption Across Activities | |||||||||||
Supporting Direct Labor | Order Processing | Customer Support | Other | Total | |||||||
Wages and salaries | 40 | % | 30 | % | 20 | % | 10 | % | 100 | % | |
Other overhead costs | 30 | % | 10 | % | 20 | % | 40 | % | 100 | % | |
During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order follow:
Data Concerning the Shenzhen Enterprises Order | |||
Units ordered | 10 | units | |
Direct labor-hours | 2 | DLHs per unit | |
Selling price | $ | 300 | per unit |
Direct materials | $ | 180 | per unit |
Direct labor | $ | 50 | per unit |
Required:
1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
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2. Compute the activity rates for the activity cost pools.
Compute the activity rates for the activity cost pools. (Round the "Direct labor support" to 2 decimal places.)
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3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs.
Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs.
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4. Calculate the customer margin for Shenzhen Enterprises.
Calculate the customer margin for Shenzhen Enterprises.
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