Determine the product margin for the OfficeMart orders under a traditional cost system Manufacturing overhead $500,000 Total activity Manufacturing overhead per unit Sales Costs: Direct materials Direct labor Manufacturing overhead Traditional costing product margin $ 1,000 units 500 per unit $ 47,600 $ 14,400 4,000 40.000 58,400 $(10,800) Note that the worksheet contains a section at the bottom titled "Determine the Product Margin Under a Traditional Cost System" that is not in the Review Problem. In this section, it is assumed that the traditional costing system allocates manufacturing overhead on the basis of the number of units produced. When completed, that part of the worksheet should contain the following results: After entering formulas in all of the cells that contained question marks, verify that the dollar amounts match the numbers in the Review Problem. Check your worksheet by doubling the units ordered in cell B16 to 160. The customer margin under activity-based costing should now be $7,640 and the traditional costing product margin should be $(21,600). If you do not get these results, find the errors in your worksheet and correct them. A 1 Chapter 5: Applying Excel 2 3 Data 4 Manufacturing overhead 5 Selling and administrative overhead 6 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 11 12 13 OfficeMart orders: 14 Customers 25 26 Manufacturing overhead 27 Selling and administrative overhead 28 Total cost 29 30 Compute the activity rates 31 Activity Cost Pools 32 Assembling units 33 Processing orders 34 Supporting customers 35 B $500,000 $300,000 37 Activity Cost Pools 38 Assembling units 39 Processing orders 40 Supporting customers 41 50% 10% 1,000 15 Orders 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor 20 21 Enter a formula into each of the cells marked with a ? below 22 Review Problem: Activity-Based Costing 23 24 Perform the first stage allocations Assembling Processing Supporting Units Orders Customers units 1 customer 4 orders 80 units $595 $180 $50 ? ? ? Assembling Processing Units Orders Total Cost 35% 45% 250 orders ? ? ? ? D 36 Compute the overhead cost attributable to the OfficeMart orders Activity Rate ? per unit ? per order ? per customer 5% 25% 100 customers Supporting Customers ? ? ? Total Activity ? units ? orders ? customers E Other Activity ? units 10% 20% Other ? ? ? F ? orders ? customer Total ? ? ? Activity Rate ? per unit ? per order ? per customer ABC Cost ? ? ? C 23 24 Perform the first stage allocations 25 26 Manufacturing overhead 27 Selling and administrative overhead 28 Total cost 29 30 Compute the activity rates 31 Activity Cost Pools 45 Direct materials Direct labor 46 47 48 32 Assembling units 33 Processing orders 34 Supporting customers 35 36 Compute the overhead cost attributable to the OfficeMart orders 37 Activity Cost Pools Activity Rate ? per unit 38 Assembling units 39 Processing orders 40 Supporting customers 41 Unit-related overhead Order-related overhead Assembling Processing Supporting Units Orders Customers 55 Manufacturing overhead per unit 56 57 Sales 58 Costs: ? ? ? 59 Direct materials Direct labor Total Cost 60 61 Manufacturing overhead 62 Traditional costing product margin 63 ? ? 42 Determine the customer margin for the OfficeMart orders under Activity-Based Costing 43 Sales ? 44 Costs: ? per order ? per customer ? ? ? ? ? ? ? ? Total Activity ? units ? orders ? customers ? ? units ? per unit ? ? ? 49 Customer-related overhead 50 Customer margin 51 52 Determine the product margin for the OfficeMart orders under a traditional cost system 53 Manufacturing overhead 54 Total activity ? ? ? ? ? ? ? Other ? Activity ? units ? ? ? ? orders ? customer Total ? ? ? Activity Rate ? per unit ? per order ? per customer ABC Cost ? ? ?