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Exercise 7-15 Comprehensive Activity-Based Costing Exercise [LO7-2, LO7-3, LO7-4, LO7-5 Advanced Products Corporation has supplied the following data from its activity-based costing system Overhead Costs
Exercise 7-15 Comprehensive Activity-Based Costing Exercise [LO7-2, LO7-3, LO7-4, LO7-5 Advanced Products Corporation has supplied the following data from its activity-based costing system Overhead Costs Wages and salaries Other overhead costs Total overhead costs 300,000 100,000 $400,000 Total Activity for the Year Activity Cost Pool Supporting direct labor Order processing Customer support Other Aativity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organizatio- 20,000 DLHS 400 orders 200 customers Not applicable sustaining activity Distribution of Resource Consumption Across Activities Supporting Order Custoner Total 100% 100% Direct Labor Processing Support Wages and salaries Other overhead costs 40t 30% 20 20% Other 108 408 108 During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order follow: Data Concerning the Shenzhen Enterprises Order Units ordered Direct labor-hours Selling price Direct materials Direct labor 10 units 2 DLHs per unit 300 per unit 180 per unit $ 50 per unit Required 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. 4. Calculate the customer margin for Shenzhen Enterprises
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