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ASAP 1. The firststage allocation of costs to the activity cost pools appears below: 2. The activity rates for the activity cost pools are: 3.
ASAP 1. The firststage allocation of costs to the activity cost pools appears below: 2. The activity rates for the activity cost pools are: 3. The overhead cost attributable to OfficeMart would be computed as follows: Review Problem: Activity-Based Costing Ferris Corporation makes a single product-a fire-resistant commercial filing cabinet-that it sells to ottice furniture distributors. The company has a simple ABC system that it uses for internal decision making. The company has two overhead departments whose costs are as follows: The company's ABC system has the following activity cost pools and activity measures: Costs assigned to the "Other" activity cost pool have no activity measure; they consist of organizationsustaining costs and unused capacity costs-neither of which are assigned to orders, customers, or the product. Ferris Corporation distributes the costs of manuficturing overhead and selling and administrative overhead to the activity cost pools based on employee interviews, the results of which are reported below: 3. The overticad cost attributable to OfficeMart would be computed as follows: 4. The customer margin can be computed as follows: Required: 1. Perform the fint-stage allocation of overhead costs to the activity cost pools as in (S) Exhibit 7-6 2. Compute activity rates for the activity cost pools as in ( Exhibit 7-7. Page 328 3. OfficeMart is one of Ferris Corporation's customers. Last year, OfficeMart ordered filing eabinets four different times, OfliceMart ordered a total of 80 filing cabinets during the ycar Construct a table as in (S) Exhibit 7 -10 showing the overhead costs attributable to Orficemart. 4. The selling price of a tiling cabinet is $595, The cost of direct materials is $180 per fliting cabinet, and direct labor is $50 per filing cabinet. What is the customer margin of Office Mart? See [S. Evhibit 7-12 for an example of how to complete this report. Solution to Review Problem 1. The firststage allocation of costs to the activity cosi pools appears below
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