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. your worksheet and 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 i correct them. Data Manufacturing overhead Selling and administrative overhead $500,000 $300,000 Manufacturing overhead Selling and administrative overhead Total activity Assembling Units 50% 10% 1,000 units Processing Orders 35% 45% 250 orders Supporting Customers 5% 25% 100 customers Other 10% 20% OfficeMart orders: Customers Orders Number of filing cabinets ordered in total Selling price Direct materials Direct labor 1 customer 4 orders 80 units $595 $180 $50 Enter a formula into each of the cells marked with a ? below Review Problem: Activity-Based Costing Perform the first stage allocations Processing Orders Other Total Assembling Units ? ? ? Manufacturing overhead Selling and administrative overhead Total cost ? Supporting Customers ? ? ? ? ? ? ? ? ? ? ? Compute the activity rates Activity Cost Pools Assembling units Processing orders Supporting customers Total Cost ? ? ? Total Activity ? units ? orders ? customers Activity Rate ? per unit ? per order ? per customer ABC Cost Compute the overhead cost attributable to the OfficeMart orders Activity Cost Pools Activity Rate Assembling units ? per unit Processing orders ? per order Supporting customers ? per customer Activity ? units ? orders ? 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 ? ? ? ? Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 8. (Prior to completing this requirement, change all worksheet figures back to their original amounts.) B D E F A 1 Chapter 7: Applying Excel 2 3 Data 4 Manufacturing overhead 5 Selling and administrative overhead 6 $500,000 $300,000 7 Assembling Units 50% 10% 1.000 units Processing Orders 35% 45% 250 orders Supporting Customers 5% 25% 100 customers Other 10% 20% 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 11 12 13 OfficeMart orders: 14 Customers 15 Orders 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor 20 1 customer Borders 80 units $595 $180 $50 (a) What is the customer margin under activity-based costing when the number of orders increases to 8? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) What is the product margin under the traditional costing system when the number of orders increases to 8? (Enter a loss as a negative amount.) Product margin under the traditional costing system (b) Based on new number of orders in Requirement 2, what is the product margin under the traditional costing system when the data are corrected? (Enter a loss as a negative amount.) Product margin under the traditional costing system (c) Which of the following statements are true about what happens when the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount? (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) 2 Costs are shifted from the processing orders cost pool to the supporting customers cost pool Costs will be shifted from customer who order more frequently to those who order less frequently. The customer margins of those who order more frequently will increase relative to the customer margins of those who order less frequently