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Check the question shared as a picture below 2. Imai Draperies makes custom curtains for homes and businesses. The company uses an activity- based costing
Check the question shared as a picture below
2. Imai Draperies makes custom curtains for homes and businesses. The company uses an activity- based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity cost pools. Overhead costs: Production overhead $240,000 Office expense 160,000 Total $400,000 Distribution of resource consumption to the activity cost pools: Supporting Job Client Labor Support Support Other Total Production overhead 25% 35% 15% 25% 100% Office expense 15% 30% 30% 25% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Annual Activity Supporting labor 21,000 hours Job Support 5,500 jobs Client Support 1,200 clients Other N/A One particular client, the Lumbard family, requested 31 jobs during the year that required a total of 120 hours of direct labor time. For this service, the client was charged $3,620. Direct material costs totaled $1,300. The direct labor wage rate is $6 per hour. Shipping cost for this client totaled $115. Required: a) Prepare the first-stage allocation of overhead costs to the activity cost pools. (10) b) Compute activity rates for the activity cost pools. (5) c) Using the activity-based costing system, compute the customer margin for the Lumbard familyStep by Step Solution
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