EXERCISE 6A-3 Second-Stage Allocations and Margin Calculations Using the Action Analysis Approach [LO6-4, LO6-6] Refer to the data for Foam Products, Inc., in Exercise 611 and the following additional details concerning the activity rates in the activity-based costing system: Management has provided its ease of adjustment codes for the purpose of preparing action analyses. EXERCISE 6A-5 Second Stage Allocations and Product Margins [LO6-4, LO6-6] Refer to the data for Pixel Studio, Inc., in PROBLEM 6-19. In addition, the company has provided the following details concerning its activity rates: Management has provided the following ease of adjustment codes for the various costs: These codes created some controversy. In particular, some administrators objected to coding their own salaries Yellow, while the technical staff salaries were coded Red. However, the founders of the firm overruled these objections by pointing out that "our technical staff is our most valuable asset. Good animators are extremely difficult to find, and they would be the last to go if we had to cut back." Required: 1. Using Exhibit 6A3 as a guide, determine the cost of the local commercials market. (Think of the local commercial market as a product.) 2. Using Exhibit 6A5 as a guide, prepare an action analysis report concerning the local commercial market. (This company has no direct materials or direct labor costs.) 3. What would you recommend to management concerning the local commercial market? EXERCISE 6A-3 Second-Stage Allocations and Margin Calculations Using the Action Analysis Approach [LO6-4, LO6-6] Refer to the data for Foam Products, Inc., in Exercise 611 and the following additional details concerning the activity rates in the activity-based costing system: Management has provided its ease of adjustment codes for the purpose of preparing action analyses. EXERCISE 6A-5 Second Stage Allocations and Product Margins [LO6-4, LO6-6] Refer to the data for Pixel Studio, Inc., in PROBLEM 6-19. In addition, the company has provided the following details concerning its activity rates: Management has provided the following ease of adjustment codes for the various costs: These codes created some controversy. In particular, some administrators objected to coding their own salaries Yellow, while the technical staff salaries were coded Red. However, the founders of the firm overruled these objections by pointing out that "our technical staff is our most valuable asset. Good animators are extremely difficult to find, and they would be the last to go if we had to cut back." Required: 1. Using Exhibit 6A3 as a guide, determine the cost of the local commercials market. (Think of the local commercial market as a product.) 2. Using Exhibit 6A5 as a guide, prepare an action analysis report concerning the local commercial market. (This company has no direct materials or direct labor costs.) 3. What would you recommend to management concerning the local commercial market
