Ferris Corporation makes fire resistant commercial filing cabinets that it sells to office distributors. The company has a simple ABC system that it uses for internal decision making. The company has two overhead departments whose costs are as follows:

Manufacturing overhead: $500,000

Selling & distribution overhead: $300,000

Total :$800,000

The Companys ABC system has the following activity cost pools and activity measures:

Activity Cost Pools	Activity Cost Measures
Assembling units	Number of units
Processing orders	Number of orders
Supporting Customers	Number of Customers
Other	Not applicable

Costs assigned to the Other activity cost pool have no activity measure; they consist of costs of unused capacity and organization-sustaining costs neither of which are assigned to orders, customers, or the product.

Ferris Corporation distributes the costs of manufacturing overhead and selling and administration overhead to the activity cost pools based on employees interviews, the results of which are reported below:

Distribution of Resource Consumption across Activity Costs Pools

	Assembling Units	Processing Orders	Supporting Customers	Other	Total
Manufacturing Overhead	50%	35%	5%	10%	100%
Selling & Administrative overhead	10%	45%	25%	20%	100%
Total Activity	1000 units	250 orders	100 Customers

You have to do the following:

1. Perform the first stage allocation of overhead costs to the activity cost pools
2. Compute the activity rates for the activity cost pools based on the total Cost based on the total Activity drivers.
3. Office Mart is one of Ferris Corporations customers. Last year, Office Mart ordered filing cabinets four different times. Office Mart ordered a total of 80 filin

   Ferris Corporation makes fire resistant commercial filing cabinets that it sells to office distributors. The company has a simple ABC system that it uses for internal decision making. The company has two overhead departments whose costs are as follows:

   Manufacturing overhead: $500,000

   Selling & distribution overhead: $300,000

   Total :$800,000

   The Companys ABC system has the following activity cost pools and activity measures:

   Activity Cost Pools	Activity Cost Measures
   Assembling units	Number of units
   Processing orders	Number of orders
   Supporting Customers	Number of Customers
   Other	Not applicable

   Costs assigned to the Other activity cost pool have no activity measure; they consist of costs of unused capacity and organization-sustaining costs neither of which are assigned to orders, customers, or the product.

   Ferris Corporation distributes the costs of manufacturing overhead and selling and administration overhead to the activity cost pools based on employees interviews, the results of which are reported below:

   Distribution of Resource Consumption across Activity Costs Pools

   	Assembling Units	Processing Orders	Supporting Customers	Other	Total
   Manufacturing Overhead	50%	35%	5%	10%	100%
   Selling & Administrative overhead	10%	45%	25%	20%	100%
   Total Activity	1000 units	250 orders	100 Customers

   You have to do the following:

4. Perform the first stage allocation of overhead costs to the activity cost pools
5. Compute the activity rates for the activity cost pools based on the total Cost based on the total Activity drivers.
6. Office Mart is one of Ferris Corporations customers. Last year, Office Mart ordered filing cabinets four different times. Office Mart ordered a total of 80 filing cabinets during the year. Construct a table showing the overhead costs attributable to Office Mart
7. The selling price of filing cabinet is $595. The cost of direct materials is $180 per filing cabinet, and direct labor is $50 per filing cabinet. What would be the Customer margin (both in value and % on sales) of Office Mart?
8. g cabinets during the year. Construct a table showing the overhead costs attributable to Office Mart
9. The selling price of filing cabinet is $595. The cost of direct materials is $180 per filing cabinet, and direct labor is $50 per filing cabinet. What would be the Customer margin (both in value and % on sales) of Office Mart?