please answer question 6-18
Required (a) Using the current cost system's approach of assigning MSDA expenses to customers using with Brown. a rate of 33% of sales revenue, determine the operating profit associated with Ashton and (b) Using the activity-based costing information provided, determine the operating profit associated with Ashton and with Brown. customers? Explain. (c) Which of the two methods produces more accurate assignments of MSDA expenses to LO 1.3 6-18 Activity-based costing of order entry costs Hampstead Company's order entry department has 20 order entry operators. The cost associated with these 20 operators (salaries, fringe benefits, and supervision, as well as occupancy and equipment costs) is $873,600 per year. After taking Into account vacations and holidays, Hampstead calculated that each operator worked about 1,920 hours per year. Allowing for breaks, training, and other time off, each operator provided about 1,560 hours of productive work each operations. year. Hampstead uses time-driven activity-based costing for its order entry Required (a) What is the rate per hour for each order entry employee for Hampstead's activity-based costing system? (b) On average, it takes an order entry employee about 0.1 hour to enter the basic customer information for a manual customer order. In addition, manual orders require an operator to spend an additional 0.02 hour to enter each line item on the order. An operator spends an average of 0.06 hour to check the information on an electronic order, but no further entries are two orders? needed for specific line items, What is the order entry cost associated with each of the following (1) A manual order with 10 line items (2) An electronic order with 10 line items. LO4 6-19 Whale curve Wright Company, a new systems consulting company, is concerned about the profitability of its customers during the past year. The company has prepared the following data: CUSTOMER PROur CUSTOMER 5221,000 14 83,000 -40,000 15 -179/000 -143,010 16 1:4000 217,000 17 50.000 22.000 18 -191,000 9,100 19 -90.000 3,000 101,000 20 21 -10,000 -200,000 22 87,000 259.000 154.100