Exercise 7-16 Comprehensive Activity-Based Costing Exercise (LO2, LO3, LO4] Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries Other overhead costs $ 280,000 157,000 Total overhead costs $437,000 Activity Cost Pool Direct labour support Order processing Customer support Other Activity Measure Number of direct labour-hours Number of orders Number of customers These costs are not allocated to products or customers Total Activity 7,955 DLHS 450 orders 200 customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour Support 20% 15% Order Processing 35% 25% Customer Support 30% 25% Other 15% Wages and salaries Other overhead costs Total 100% 100% 35% During the year, Cancico Communications completed an order for special telephone equipment for a new customer, HurnTel. This customer did not order any other products during the year. Data concerning that order follow: Selling price Units ordered Direct materials Direct labour-hours Direct labour rate $ 221 per unit 150 units $ 195 per unit 0.6 DLH per unit $ 29 per DLH Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Direct Labour Support Order Processing Customer Support Other Totals Wages and salaries Other overhead costs Total cost 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pools Direct labour support Order processing Customer support Activity Rate per DLH per order per customer 3. Prepare a report showing the overhead costs for the order from HurnTel, including customer support costs. (Round your answers to 2 decimal places.) ABC Cost Activity Cost Pool Direct labour support Order processing Customer support Total Activity Rate per DLH per order per customer Activity DLHS orders customer 4. Prepare a report showing the customer margin for HurnTel. (Round your answers to 2 decimal places.) Sales Costs: Direct materials Direct labour Direct labour support overhead Order processing overhead Customer support overhead Customer margin Exercise 7-16 Comprehensive Activity-Based Costing Exercise (LO2, LO3, LO4] Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries Other overhead costs $ 280,000 157,000 Total overhead costs $437,000 Activity Cost Pool Direct labour support Order processing Customer support Other Activity Measure Number of direct labour-hours Number of orders Number of customers These costs are not allocated to products or customers Total Activity 7,955 DLHS 450 orders 200 customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour Support 20% 15% Order Processing 35% 25% Customer Support 30% 25% Other 15% Wages and salaries Other overhead costs Total 100% 100% 35% During the year, Cancico Communications completed an order for special telephone equipment for a new customer, HurnTel. This customer did not order any other products during the year. Data concerning that order follow: Selling price Units ordered Direct materials Direct labour-hours Direct labour rate $ 221 per unit 150 units $ 195 per unit 0.6 DLH per unit $ 29 per DLH Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Direct Labour Support Order Processing Customer Support Other Totals Wages and salaries Other overhead costs Total cost 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pools Direct labour support Order processing Customer support Activity Rate per DLH per order per customer 3. Prepare a report showing the overhead costs for the order from HurnTel, including customer support costs. (Round your answers to 2 decimal places.) ABC Cost Activity Cost Pool Direct labour support Order processing Customer support Total Activity Rate per DLH per order per customer Activity DLHS orders customer 4. Prepare a report showing the customer margin for HurnTel. (Round your answers to 2 decimal places.) Sales Costs: Direct materials Direct labour Direct labour support overhead Order processing overhead Customer support overhead Customer margin
