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OfficeMart has found an error in its data. The percentage of selling and administrative overhead attributable to processing orders should be changed to 30% from

OfficeMart has found an error in its data. The percentage of selling and administrative overhead attributable to processing orders should be changed to 30% from 45% and the percentage attributable to supporting customers should be changed to 40% from 25%.

Chapter 5: Applying Excel
Data
Manufacturing overhead $500,000
Selling and administrative overhead $300,000
Assembling Units Processing Orders Supporting Customers Other
Manufacturing overhead 50% 35% 5% 10%
Selling and administrative overhead 10% 30% 40% 20%
Total activity 1,000 250 100
units orders customers
OfficeMart orders:
Customers 1 customer
Orders 8 orders
Number of filing cabinets ordered in total 80 units
Selling price $595
Direct materials $180
Direct labor $50

(a) Based on new number of orders in Requirement 2, what is the customer margin under activity-based costing when the data are corrected? (Enter a loss as a negative amount.)

(b) Based on new number of orders in Requirement 2, what is the product margin under the traditional costing system when the data are corrected? (Enter a loss as a negative amount.)

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