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Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $275,000 Other overhead 155,000 costs Total overhead
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $275,000 Other overhead 155,000 costs Total overhead costs $430,000 Total Activity 7,825 DLHs Activity Cost Pool Activity Measure Direct labour Number of direct labour- support hours Order processing Number of orders Customer support Number of customers Other These costs are not allocated to products or customers 450 orders 200 customers NA Distribution of Resource Consumption across Activity Cost Pools Distribution of Resource Consumption across Activity Cost Pools Direct Labour Order Customer Support Processing Support 20% 35% 30% Other 15% Total 100% Wages and salaries 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 Units ordered Direct materials Direct labour- hours Direct labour rate $225 per unit 140 units $200 per unit DLH per 0.6 unit $ 27 per DLH 1. Prepare a report showing the first stage allocations of overhead costs to the activity cost pools Direct Labour Support Order Processing Customer Support Other Totals Wages and salaries Other overhead costs Total cost 2. Compute the activity rates for the activity cost pools. (Round your answers to 24 decimal places.) Activity Cost Pools Direct labour support Order processing Customer support Activity Rate per DLA per order per customer 3. Prepare a report showing the overhead costs for the order from HurnTel, including customer support costs. (Round your answers to 2 decimal places.) ABC Cost Activity Rate Activity DLHS Activity Cost Pool Direct labour support Order processing Customer support Total per DLH per order orders customer per customer 4. Prepare a report showing the customer margin for HurnTel. (Round your answers to 2 decimal places.) Sales Costs: Direct materials Direct labour Direct labour support overhead Order processing overhead Customer support overhead Customer margin
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