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Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity Cost Pool Activity Measure Activity Rate Order size Number of direct laborhours $ 16.10 per direct laborhour Customer orders Number of customer orders $ 363.00 per customer order Product testing Number of testing hours 3; 79.00 per testing hour Selling Number of sales calls $1,489.00 per sales call The managing director of the company would like information concerning the cost ofa recently completed order for heavy-duty trailer axles. The order required 160 direct labor-hours, 17 hours of product testing, and 2 sales calls. Required: What is the total overhead cost assigned to the order for heavyduty trailer axles? Order size Customer orders Product testing Total overhead cost 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 [ Total Activity for Activity Cost Pool Activity Measure the Year Supporting direct labor Number of direct laborhours 20,000 DLHs Order processing Number of customer orders 400 orders Customer support Number of customers 200 customers Other This is an organization Not applicable sustaining activity , Distribution of Resource Consumption Across Activities Supporting Order Customer Direct Labor Processing Support Other Total Wages and salaries 4095 3095 2095 1095 10095 Other overhead costs 3095 1095 2095 4095 10095 [ 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 laborhours 2 DLHs per unit Selling price $ 300 per unit Direct materials $ 180 per unit Direct labor 1; 50 per unit Direct-materials $ 180 per unit Direct labor 1; 50 per unit Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. 4. Calculate the customer margin for Shenzhen Enterprises. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Wages and salaries _____ Other overhead costs _____ Total cost Required 2 > Required 1 Required 2 Required 3 Required 4 Compute the activity rates for the activity cost pools. (Round the "Direct labor support" to 2 decimal places.) Activity Cost Pool Activity Rate Supporting direct labor per DLH Order processing per order Customer support per customer Required 1 Required 2 Required 3 Required 4 Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. Supporting direct labor Order processing Customer support Total Required 1 Required 2 Required 3 Required 4 Calculate the customer margin for Shenzhen Enterprises. Customer marginHiTek Manufacturing, Inc., makes two types of industrial component partsthe B300 and the T500. An absorption costing income statement for the most recent period is shown: HiTek Manufacturing Inc. Income Statement Sales $ 1,720,000 Cost of goods sold 1,243,140 Gross margin 476,860 Selling and administrative expenses 560,000 Net operating loss $ (83.140) Hi-Tek produced and sold 60,400 units of 3300 at a price of $20 per unit and 12,800 units of T500 at a price of $40 per unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: 3300 T500 Total Direct materials $ 400,000 $ 162.300 $ 562,300 Direct labor $120,700 $ 42,600 163,300 Manufacturing overhead 517,540 Cost of goods sold $1,243,140 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek's ABC implementation team concluded that $58,000 and $102,000 of the company's advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also distributed the company's manufacturing overhead to four activities as shown below: Manufactu ring Activity Activity Cost Pool (and Activity Measure) Overhead 3300 T500 Total Machining (machinehours) $ 208,080 90,800 62,200 153,000 Setups (setup hours) 148,260 73 280 353 Productsustaining (number of products) 100.600 1 1 2 Other (organizationsustaining costs) 60.600 NA NA NA Total manufacturing overhead cost $517.540 Required: 1. Compute the product margins for the B300 and T500 under the company's traditional costing system. 2. Compute the product margins for B300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments. Complete this qustion by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product margins for the B300 and T500 under the company's traditional costing system. (Round your intermediate calculations to 2 decimal places and nal answers to the nearest whole dollar amount.) Compute the product margins for B300 and T500 under the activity-based costing system. (Negative product margins should be indicated by a minus sign. Round your intermediate calculations to 2 decimal places.) B300 T500 Total % of % of Amount Amount Amount Traditional Cost System % % 0% % % % Total cost assigned to products Total cost B300 T500 Total % of % of Amount Total Amount Amount Total Amount Amount Activity-Based Costing System Direct costs:Indirect costs: Total cost assigned to products Costs not assigned to products: Total cost Pixel Studio. Inc., is a small company that creates computer-generated animations for films and television. Much of the company's work consists of short commercials for television, but the company also does realistic computer animations for special effects in movies. The young founders of the company have become increasingly concerned with the economics of the businessparticularly since many competitors have sprung up recently in the local area. To help understand the company's cost structure, an activity-based costing system has been designed. Three major activities are carried out in the company: animation concept, animation production, and contract administration. The animation concept activity is carried out at the contract proposal stage when the company bids on projects. This is an intensive activity that involves individuals from all parts of the company in creating story boards and prototype stills to be shown to the prospective client. Once a project is accepted by the client, the animation goes into production and contract administration begins. Almost all of the work involved in animation production is done by the technical staff, whereas the administrative staff is largely responsible for contract administration. The activity cost pools and their activity measures are listed below: Activity Cost Pool Activity Measure Activity Rate Animation concept Number of proposals $7.000 per proposal Animation production Minutes of completed animation $7.100 per minute Contract administration Number of contracts $6.400 per contract These activity rates include all of the company's costs, except for its organization-sustaining costs and idle capacity costs. There are no direct labor or direct materials costs. Preliminary analysis using these activity rates has indicated that the local commercial segment of the market may be unprotable. This segment is highly competitive. Producers of local commercials may ask three or four companies like Pixel Studio to bid, which results in an unusually low ratio of accepted contracts to bids. Furthermore, the animation sequences tend to be much shorter for local commercials than for other work. Since animation work is billed at fairly standard rates according to the running time of the completed animation, this means that the revenues from these short projects tend to be below average. Data concerning activity in the local commercial market appear below: Local Activity Measure Commercials Number of proposals 27 Minutes of completed animation 9 Number of contracts 5 The total sales from the 5 contracts for local commercials was $260,000. Required: 1. Calculate the cost of serving the local commercial market. 2. Calculate the margin earned serving the local commercial market. (Remember, this company has no direct materials or direct labor costs.) Complete thls question by entering your answers In the tabs below. Required 1 Required 2 Calculate the cost of serving the local commercial market. _:| Required 1 Required 2 Calculate the margin earned serving the local commercial market. (Remember, this company has no direct materials or direct labor costs.)