Award: 2.00 points SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity based costing system that has four activity cost pools: Travel Pickup and Delivery, Customer Service, and other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organization sustaining activity. The following costs will be assigned using the activity-based costing system Driver and guard wages $ 1,000,000 Vehicle operating expense 430.000 Vehicle depreciation 310.00 Customer representative salaries and expenses 340,000 Office expenses 200,000 Administrative expenses 500.000 Total cost $ 2,700.000 Delivery The distribution of resource consumption across the activity cost pools is as follows: Pickup and Customer Travel Service Driver and guard wages SON 35% 10% Vehicle operating expense 70% 5% 0% Vehicle depreciation 60% 15% 0% Customer representative salaries and expenses 0% 0% 90% Office expenses 0% 20% 30% Administrative expenses 0% 5% 60% Over 5% 25% 25% 10% 50% 35% Totals 100% 100% 100% 100% 100% 100% Required: Complete the first stage allocations of costs to activity cost pools. Pickup and Delivery Customer Service Travel Other Totals $ 0 0 0 0 Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost 0 O $ 0 $ o $ 0 $ 0 $ 0 References Worksheet Difficulty: 1 Easy Learning Objective: 07-02 Assign costs to cost pools using a first- stage allocation Award: 2.00 points Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes. The proprietor of the company believes that costs are driven primarily by the size of customer lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers. In addition, the costs of maintaining garden beds depends on whether the beds are low maintenance beds (mainly ordinary trees and shrubs) or high maintenance beds (mainly flowers and exotic plants). Accordingly, the company uses the five activity cost pools listed below: Activity Cost Pool Activity Measure Caring for lawn Square feet of lawn Caring for garden beds-low maintenance Square feet of low maintenance beds Caring for garden beds-high maintenance Square foot of high maintenance beds Travel to jobs Miles Customer billing and service Number of customers The company already has completed its first stage allocations of costs and has summarized its annual costs and activity as follows: Activity Cost Pool Caring for Lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service Estimated Overhead Cost $ 80,200 $ 32,800 $ 68,160 $ 3,400 $ 7,100 Expected Activity 165,000 square feet of lawn 30,000 square feet of low maintenance beds 24,000 square feet of high maintenance beds 21,000 miles 34 customers Required: Compute the activity rate for each of the activity cost pools. (Round your answers to 2 decimal places.) Activity Rate Activity Cost Pool Caring for lawn Caring for garden beds-low maintenance Caring for garden beds-high maintenance Travel to jobs Customer billing and service per square ft of lawn per square ft of low maintenance beds per square ft of high maintenance beds per mile per customer References Worksheet Difficulty: 1 Easy Learning Objective: 07-03 Compute activity rates for cost pools. Award: 2.00 points Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 7 per direct labor-hour Machine processing $ per machine-hour Machine setups $ 40 per setup Production orders $ 150 per order Shipments $ 125 per shipment Product sustaining $ 825 per product Activity data have been supplied for the following two products: Total Expected Activity K425 M67 Number of units produced per year 200 2.000 Direct labor-hours 1,050 30 Machine-hours 3,000 20 Machine setups 15 2 Production orders 15 2 Shipments 30 2. Product sustaining 2. 2 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? K425 M67 Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost Award: 2.00 points Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company's activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Activity Measure Activity Rate Supporting direct labor Number of direct labor-hours $ 9 per direct labor-hour Batch processing Number of batches $ 90 per batch Order processing Number of orders 278 per order Customer service Number of customers $ 2.612 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $142.10 per unit, the direct materials cost was $111 per unit, and the direct labor cost was $13.70 per unit. This was Interstate Trucking's only order during the year. Required Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis Costs: Customer margin References Worksheet Learning Objective: 07-04 Assign costs to a cost object using a second- stage allocation. Difficulty: 1 Easy Learning Objective: 07-05 Use activity-based costing Award: 2.00 points Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first stage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 18,810 5,700 parties Serving a diner Number of diners served $ 92,720 12,200 diners Serving drinks Number of drinks ordered $ 36,050 10,300 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15. Required: 182. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? (Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places.) Total Cost a. A party of three diners who order five drinks in total. b. A party of three diners who do not order any drinks. C. A party of one diner who orders four drinks. Average Cost per diner per diner per diner Garrison_16e_Rechecks_2019_10_08 References Worksheet Learning Objective: 07- 03 Compute activity rates for cost pools. Award: 2.00 points Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 7 per direct labor-hour Machine processing $ per machine-hour Machine setups $ 40 per setup Production orders $ 150 per order Shipments $ 125 per shipment Product sustaining $ 825 per product Activity data have been supplied for the following two products: Total Expected Activity K425 M67 Number of units produced per year 200 2.000 Direct labor-hours 1,050 30 Machine-hours 3,000 20 Machine setups 15 2 Production orders 15 2 Shipments 30 2. Product sustaining 2 2 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? K425 M67 Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost Award: 2.00 points Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first stage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Activity Measure Total Cost Total Activity Serving a party of diners Number of parties served $ 18,810 5,700 parties Serving a diner Number of diners served $ 92,720 12,200 diners Serving drinks Number of drinks ordered $ 36,050 10.300 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15. Required: 182. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? (Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places.) Total Cost a. A party of three diners who order five drinks in total. b. A party of three diners who do not order any drinks. C. A party of one diner who orders four drinks. Average Cost per diner per diner per diner Garrison_16e_Rechecks_2019_10_08 References Worksheet Learning Objective: 07- 03 Compute activity rates for cost pools