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Juvilus Inc. has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $307,000 Rent expense $95,000 Other overhead costs
Juvilus Inc. has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $307,000 Rent expense $95,000 Other overhead costs $287,000 Total overhead costs $689,000 Activity Cost Pool Direct labour support Order processing Customer support Other Activity Measure Number of direct labour-hours (DLH) Number of orders Number of customers Total Activity 8,500 DLHS 1,150 orders 1,000 customers N/A Total Distribution of Resource Consumption Across Activity Cost Pools Direct Order Customer Labour Other Processing Support Support Wages and salaries 25% 25% 25% 25% Rent expense 0% 0% 0% 100% Other overhead costs 10% 20% 30% 40% 100% 100% 100% During the year, Juvilus Inc. completed an order for a new customer, Klumee Inc. This customer did not order any other products during the year. Data concerning their order follows. During the year, Juvilus Inc. completed an order for a new customer, Klumee Inc.. This customer did not order any other products during the year. Data concerning their order follows. $380 per unit Selling price Units ordered 290 units Direct materials $175 per unit Direct labour-hours 1.5 DLH per unit Direct labour rates $20 per DLH 1. What is the total overhead cost related to order processing? (1 mark) 2. What is the total overhead cost that will be allocated to products? (2 marks) 3. What is the total overhead cost that will be allocated to customers? (2 marks) 4. What is the activity rate for direct labour support (rounded to two decimals)? (1 mark) 5. What is the activity rate for order processing (rounded to two decimals)? (1 mark) 6. What is the activity rate for customer support (rounded to two decimals)? (1 mark) 7. What is the sales revenue from Klumee Inc.? (1 mark) 8. What are the total direct costs traced to Klumee Inc.? (2 marks) 9. What amount of overhead will be allocated to Klumee Inc. (rounded to nearest dollar)? (2 marks) 10. What is Klumee Inc.'s customer margin (rounded to nearest dollar)? (2 marks)
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