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1 Required information nts The Chapter 7 Form worksheet is to be used to create your own worksheet version of the Review Problem for Activity Based Costing found in the text (include a link of the problem) eBook 2. Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 7. (Prior to completing this requirement, change all worksheet figures back to their original amounts.) Print A B C D E 1 Chapter 7: Applying Excel 2 3 4 Data Manufacturing overhead Selling and administrative overhead $ 5 500,000 300,000 $ 6 7 Assembling Units 50% Other Processing Orders 35% 45% 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 11 Supporting Customers 5% 25% 100 109 20% 10% 1,000 250 units orders customers 12 1 customer Torders 13 OfficeMart orders: 14 Customers 15 Orders 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor 80 units $ 595 $ 180 $ 50 11 points (a) What is the customer margin under activity-based costing when the number of orders increases to 7? (Enter a loss as a negative amount.) Customer margin under activity-based costing eBook Print (b) What is the product margin under the traditional costing system when the number of orders increases to 7? (Enter a loss as a negative amount.) Product margin under the traditional costing system (c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease! ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease. ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected! ? If a customer orders more frequently but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected. ANT TU CUISIG ELLEN Required information A B C D 1 Chapter 7: Applying Excel 2 3 Data 4 $ Manufacturing overhead Selling and administrative overhead 500.000 5 $ 300.000 6 7 Assembling Units 50% Other Supporting Customers 5% 8 Processing Orders 35% 25% Manufacturing overhead Selling and administrative overhead Total activity 9 10% 20% 10% 45% 10 1.000 250 1100 units orders customers 12 13 OfficeMart orders: 14 1 customer Customers Orders 15 7 orders 80 units 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials $ 595 $ 180 19 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.) Customer margin under activity based costing (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.) Product margin under the traditional costing system (C) Which of the following statements are true about what happens when the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) ? When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount costs are shifted from the processing orders cost pool to the supporting customers cost pool. 2 When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, costs will be shifted from customers who order more frequently to those who order less frequently 2 When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, the customer margins of those who order more frequently will increase relative to the customer margins of those who order less frequently