Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer parts a and b of 1. full feedback for those who help. Betty's Boutique is considering using an ABC Costing System to allocate
please answer parts a and b of 1. full feedback for those who help. Betty's Boutique is considering using an ABC Costing System to allocate overhead to each other product lines, prom dresses and wedding dresses. Betty provides you with the following information, Total overhead costs are currently $60,000 and she has identified the following cost drivers and quantities for each driver. Wedding Total quantity of item Prom dresses Total dollars dresses driver Revenues $280.000 $750,000 $ 1.030,000 556,000 $187.500 $243,500 Less: Direct Materials Store support (overhead): Ordering 150 orders 350 orders $82,500 500 orders Delivery 600 deliveries 400 deliveries $65,000 1.200 stock 1.300 stock $30.000 hours hours Shelf Stocking 1.000 deliveries 2.500 stock thours 4,400 labor hours Customer assistance 3.200 hours 1.200 hours $55.000 Total OH costs $232.500 Gross Profit 5554.000 Part 1: Using the information above, calculate the activity cost driver rates under the new, ABC Costing method approach. Ordering Delivery Shelf Stocking Quality control Part 2: Using the activity cost driver rates you have calculated and the information above, calculate the new gross profit for each product line under an ABC approach Part 1: Using the information above, calculate the activity cost driver rates under the new. ABC Costing method approach Ordering Delivery Shelf Stocking Quality control Part 2: Using the activity cost driver rates you have calculated, and the information above, calculate the new gross profit for each product line under an ABC approach. Item Prom dresses Wedding dresses Revenues $280.000 $750,000 Less: Direct Materials $56.000 $187.500 Store Support (overhead) costs: Ordering Delivery Shelf Stocking Quality control Total OH Costs Gross Profit
please answer parts a and b of 1. full feedback for those who help.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started