Chapter 7 Assignment A Saved Exercise 7-14 Second-Stage Allocation and Margin Calculations (LO3, LO4] Roll Board Inc. manufactures several models of high-quality skateboards. The company's ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: 10 Activity Cost Pool Supporting direct labour Batch processing Order processing Customer service Activity Measure Number of direct labour-hours Number of batches Number of orders Number of customers Activity Rate $ 15 per direct labour-hour $ 99 per batch $ 174 per order $ 1,330 per customer points eBook Ask The company just completed a single order from SkateCo for 3,250 entry-level skateboards. The order was produced in 27 batches. Each skateboard required 0.8 direct labour-hours. The selling price was $130 per skateboard, the direct materials cost was $77.60 per skateboard, and the direct labour cost was $17.50 per skateboard. This was the only order from SkateCo for the year. Print Required: Prepare a report showing the customer margin on sales to SkateCo for the year. Sales Costs: Direct materials Direct labour Supporting direct labour Batch processing Order processing Customer service overhead Customer margin Chapter 7 Assignment i Saved Problem 7-22 Activity Rates and Activity-Based Management (LO2, LO3] Onassis Catering is a Greek company that provides passenger and crew meals to airlines operating out of two international airports in Athens and Corfu. The operations at the two airports are managed separately, and top management believes that there may be benefits to greater sharing of information between the two operations. 20 points To better compare the two operations, an ABC system has been designed with the active participation of the managers at both airports. The ABC system is based on the following activity cost pools and activity measures: eBook Ask Activity Cost Pool Meal preparation Flight-related activities Customer service Other (costs of idle capacity and organization-sustaining costs) Activity Measure Number of meals Number of flights Number of customers Print NA The operation at Athens International Airport (AIA) serves 1 million meals annually on 5,000 flights for 10 different airlines. (Each airline is considered one customer.) The annual cost of running the AIA airport operation, excluding only the costs of raw materials for meals, totals 3,743,300. Note: The currency in Greece is the euro, denoted by . Annual Cost of the AIA Operation Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs 3,040,000 37,800 231,000 79,000 197,500 158,000 Total cost 3,743,300 Chapter 7 Assignment Saved To help determine the activity rates, employees were interviewed and asked how they divided their time among the four major activities. The results of employee interviews at AIA are displayed below: Distribution of Resource Consumption across Activities at the AIA Operation Meal 20 Customer Service Other points 0% Preparation 75% 100% 35% 65% 0% 0% Flight- Related 20% 0% 20% 0% 25% 0% Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs 0% 40% 5% Total 100% 100% 100% 100% 100% 100% 0% eBook 50% 0% 35% 25% 100% Ask Print Required: 1. Perform the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; input a 0 wherever it is required.) Meal Preparation Flight Related Customer Service Other Totals Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs Total cost Chapter 7 Assignment ( Saved Administrative wages and salaries Building costs Total cost L L 20 points 2. Compute the activity rates for the activity cost pools. (Round your activity rates for meal preparation to 4 decimal places and flight-related to 2 decimal places. Do not leave any empty spaces; input a 0 wherever it is required.) eBook Ask Meal Activity at AIA Preparation 1,000,000 meals Flight-Related 5,000 flights Customer Service 10 airlines Print Cooks and delivery personnel wages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs Total cost