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Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $262,500 Other overhead 150,000 costs Total overhead
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $262,500 Other overhead 150,000 costs Total overhead costs $ 412,500 Total Activity 7,500 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 600 orders 120 customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour Order Customer Support Processing Support 20% 40% 30% Other Total 10% 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 $220 per unit 115 units $ 195 per unit DLH per 0.6 unit $ 22 per DLH Required: 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 $ 0 $ 0 $ 0 $ 0 $ 0 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pools Direct labour support Order processing Customer support Activity Rate per DLH per order per customer W! 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 0 Activity Cost Pool Direct labour support Order processing Customer support Total Activity Rate per DLH per order per customer Activity DLHS orders customer $ $ 0.00 $ 0.00 $ 0.00 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 0.00 $ 0.00
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