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Designer Curtains Sdn. Bhd. makes custom draperies for homes and businesses. The company uses an activity-based costing system for its overhead costs. The company
Designer Curtains Sdn. Bhd. makes custom draperies 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 Office expense Total Distribution of resource consumption: Production overhead Office expense The amount of activity for the year is as follows: Activity Cost Pool Making drapes Order processing Required: RM140,000 RM120,000 RM260,000 Activity Cost Pools Making Order Drapes Processing Total 60% 40% 100% 30% 70% 100% Annual Activity 2,000 yards 140 orders a) Prepare the first-stage allocation of overhead costs to the activity cost pools. Show your workings in the answer sheet. (5 marks) b) Compute the activity rates (i.e., cost per unit of activity) for the Making Drapes and Order Processing activity cost pools. Show your workings in the answer sheet. (5 marks) c) Compute the Overhead cost of the job order and prepare a Sales Margin report showing the company margin on sales of one (1) order that involves making 70 yards of drapes and has direct materials and direct labor cost of RM2,030. The sales revenue from this job order is RM11,500. (10marks)
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Step: 1
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Step: 2
Step: 3
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