MA 4-22

Actual costing, normal costing, accounting for manufacturing overhead. Dakota Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using direct manufacturing labor costs. Dakota provides the following information:

Budget for 2017 Actual Results for 2017 Direct material costs $2,250,000 $2,150,000 Direct manufacturing labor costs 1,700,000 1,650,000 Manufacturing overhead costs 3,060,000 3,217,500Home Insert Page Layout Formulas Data Review View A B C D E 1 2 Pharmahelp, 2017 General 3 Supermarket Drugstore Mom-and-Pop Total For 4 Chains Chains Single Stores Pharmahelp 5 Revenues $3,708,000 $3,150,000 $1,980,000 $8,838,000 6 Cost of goods sold 3,600,000 3,000,000 1,800,000 8,400,000 7 Gross margin $ 108,000 $ 150,000 $ 180,000 438,000 8 Other operating costs 301,080 9 Operating income $ 136,920Activity Area Cost Driver Order processing Number of customer purchase orders Line-item processing Number of line items ordered by customers Delivering to stores Number of store deliveries Cartons shipped to store Number of cartons shipped Stocking of customer store shelves Hours of shed-stocking Home Insert Page Layout Formulas Data Review View A B C D E 13 14 Activity-based Cost Data Activity Level 15 Pharmahelp 2017 General Total Cost 16 Supermarket Drugstore Mom-and-Pop of Activity 17 Activity Chains Chains Single Stores in 2017 18 Orders processed (number) 140 360 1,500 $ 80,000 19 Line-items ordered (number) 1,960 4,320 15,000 63,840 20 Store deliveries made (number) 120 360 1,000 71,000 21 Cartons shipped to stores (number) 36,000 24,000 16,000 76,000 22 Shelf stocking (hours) 360 180 100 10,240 23 $301,080