Question
Cancico Communications has supplied the following data for use in its activity-based costing system: Overhead Costs Wages and Salaries 262,500 Other overhead costs 150,000 Total
Cancico Communications has supplied the following data for use in its activity-based costing system:
Overhead Costs | |
Wages and Salaries | 262,500 |
Other overhead costs | 150,000 |
Total overhead costs | 412,500 |
Activity Cost Pool | Activity Measure | Total Activity |
Direct labour support | Number of direct labour-hours | 7,500 DLHs |
Order processing | Number of orders | 600 Orders |
Customer Support | Number of Customers | 120 Customers |
Other | Costs not allocated to Products or customers | Not Applicable |
Distribution of Resource Consumption across Activity Cost Pools
| Direct Labour support | Order Processing | Customer Support | Other | Total |
Wages and Salaries | 20% | 40% | 30% | 10% | 100% |
Other Overhead Costs | 15% | 25% | 25% | 35% | 100% |
During the year, Cancico Communications completed an order for special telephone equipment for a new customer, HurnTel. This customer did not order any other products during the year. Data concerning that order follow:
Selling price $220 per unit
Units ordered 115 units
Direct materials - $195 per unit
Direct labour-hours 0.6 DLH per unit
Direct labour rate - $22 per DLH
*Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
* Compute the activity rates for the activity cost pools
* Prepare a report showing the overhead costs for the order from HurnTel, including customer support costs.
*Prepare a report showing the customer margin for HurnTel.
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