Question
Download the Applying Excel form and enter formulas in all cells that contain question marks. For example, in cell B26 enter the formula = B4*B8.
Download the Applying Excel form and enter formulas in all cells that contain question marks.
For example, in cell B26 enter the formula = B4*B8.
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:
52 | Determine the product margin for the OfficeMart orders under a traditional cost system | ||||||
53 | Manufacturing overhead | $ | 500,000 |
|
|
|
|
54 | Total activity |
| 1,000 | units |
|
| |
55 | Manufacturing overhead per unit | $ | 500 | per unit |
|
| |
56 |
|
|
|
|
|
| |
57 | Sales |
| $ | 47,600 |
|
| |
58 | Costs: |
|
|
|
|
| |
59 | Direct materials | $ | 14,400 |
|
|
|
|
60 | Direct labor |
| 4,000 |
|
|
|
|
61 | Manufacturing overhead |
| 40,000 |
| 58,400 |
|
|
62 | Traditional costing product margin |
|
| $ | (10,800) |
|
|
63 |
|
|
|
|
|
|
|
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.
Save your completed Applying Excel form to your computer and then upload it here by clicking Browse. Next, click Save. You will use this worksheet to answer the questions in Part 2.
Chapter 7: Applying Excel | |||||
Data | |||||
Manufacturing overhead | $500,000 | ||||
Selling and administrative overhead | $300,000 | ||||
Assembling Units | Processing Orders | Supporting Customers | Other | ||
Manufacturing overhead | 50% | 35% | 5% | 10% | |
Selling and administrative overhead | 10% | 45% | 25% | 20% | |
Total activity | 1,000 | 250 | 100 | ||
units | orders | customers | |||
OfficeMart orders: | |||||
Customers | 1 | customer | |||
Orders | 4 | orders | |||
Number of filing cabinets ordered in total | 80 | units | |||
Selling price | $595 | ||||
Direct materials | $180 | ||||
Direct labor | $50 | ||||
Enter a formula into each of the cells marked with a ? below | |||||
Review Problem: Activity-Based Costing | |||||
Perform the first stage allocations | |||||
Assembling Units | Processing Orders | Supporting Customers | Other | Total | |
Manufacturing overhead | ? | ? | ? | ? | ? |
Selling and administrative overhead | ? | ? | ? | ? | ? |
Total cost | ? | ? | ? | ? | ? |
Compute the activity rates | |||||
Activity Cost Pools | Total Cost | Total Activity | Activity Rate | ||
Assembling units | ? | ? | units | ? | per unit |
Processing orders | ? | ? | orders | ? | per order |
Supporting customers | ? | ? | customers | ? | per customer |
Compute the overhead cost attributable to the OfficeMart orders | |||||
Activity Cost Pools | Activity Rate | Activity | ABC Cost | ||
Assembling units | ? | per unit | ? | units | ? |
Processing orders | ? | per order | ? | orders | ? |
Supporting customers | ? | per customer | ? | customer | ? |
Determine the customer margin for the OfficeMart orders under Activity-Based Costing | |||||
Sales | ? | ||||
Costs: | |||||
Direct materials | ? | ||||
Direct labor | ? | ||||
Unit-related overhead | ? | ||||
Order-related overhead | ? | ||||
Customer-related overhead | ? | ? | |||
Customer margin | ? | ||||
Determine the product margin for the OfficeMart orders under a traditional cost system | |||||
Manufacturing overhead | ? | ||||
Total activity | ? | units | |||
Manufacturing overhead per unit | ? | per unit | |||
Sales | ? | ||||
Costs: | |||||
Direct materials | ? | ||||
Direct labor | ? | ||||
Manufacturing overhead | ? | ? | |||
Traditional costing product margin | ? | ||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started