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G B D E H EMD Corporation manufactures Product S. It is considering implementing an activity-based casting (ABC) system that allocates all of its indirect
G B D E H EMD Corporation manufactures Product S. It is considering implementing an activity-based casting (ABC) system that allocates all of its indirect costs to four cost pooh The following additional information is available for the company as a whole and for Product S. Activity Cost Pool Activity Measure Total Cost Total Activity Order processing Number of orders $340,000 20,000 orders Machine setups Number of setups $180,000 600 setups Customer relation Number of $84,000 700 customers customers The company just completed orders from a specific customer - PG Inc, and has the following information gathered. Orders processed for the customer PG, Inc.: 20 orders for Product S, Machine has been set up 4 times to manufacture these Ss. Product S: direct cost information Direct labor cost per unit = $5 Direct materials cost per unit = $2 Sell Price = $17, a total of 800 Ss being sold to PG, Inc. 1. Compute the activity rates for each cost pool 2. Calculate the total indirect overhead cost being allocated to the customer - PG, Inc.? 3. Calculate the customer margin for the customer - PG, Inc
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