Question
As you might imagine the ABC Tank Manufacturing Company uses an activity-based costing system. ABC has given you the following data that is used in
As you might imagine the ABC Tank Manufacturing Company uses an activity-based costing system. ABC has given you the following data that is used in its activity-based costing system: Overhead Costs Wages and salaries $ 348,000 Other overhead costs 193,000 Total overhead costs $ 541,000 Activity Cost Pool Activity Measure Total Activity Direct labor support Number of direct labor-hours 10,500 DLHs Order processing Number of orders 480 orders Customer support Number of customers 105 customers Other This is an organization-sustaining activity Not applicable Distribution of Resource Consumption Across Activities Direct Labor Support Order Processing Customer Support Other Total Wages and salaries 10 % 25 % 20 % 45 % 100 % Other overhead costs 25 % 20 % 20 % 35 % 100 % Early in this year, ABC Tank completed an order for a special vertical envelopment tank for a new customer, Sky Tanks. This was the only order from this customer for the whole year. Below is some data concerning that order: Data Concerning the Sky Tank Order Selling price $ 270 per unit Units ordered 100 units Direct materials $ 258 per unit Direct labor-hours 0.9 DLH per unit Direct labor rate $ 22 per DLH 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. (Round your answers to 2 decimal places.) 3. Compute the overhead costs for the order from Sky Tank, including customer support costs. (Round your intermediate calculations and final answers to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started