Please help since I am stuck.
Using the information provided in Exhibits below;
1) Allocate the selling and administrative expenses of 2020 to activity cost pools.
2)Compute for 2020 the activity rate for each of the activity cost pools.
Exhibit 5 Distribution of Selling & Admin Resources Consumption Across Activity Cost Pools for 2020 Activities Making New Post-Sale Sales Negotiating Processing Warehousing Customer Customer Calls Contracts Orders Activities Development Shipping Service Other Total Cost items Administrative Wages 5% 5% 30% 5% 10% 10% 15% 20% 100% 20% 20% 60% 100% Advertising Salesroom Building 75% 25% 100% Depreciation Office Maintenance 65% 35% 100% Office Equipment 5% 5% 40% 20% 5% 25% 100% Depreciation Promotional Materials 50% 5% 35% 10% 100% 100% 100% Shipping Costs 100% Salesroom Property 55% 35% 10% Taxes and Insurance Salespeople Travel 50% 5% 40% 5% 100% Salesroom Utilities 25% 20% 10% 5% 40% 100% and Fuel Warehouse Wages 15% 80% 5% 100% 100% Other Administrative 100% ExpensesExhibit 3 Income Statement For Year Ended December 31, 2020 Sales 3,114, 160 Less Cost of Goods Sold 1,779,520 Gross Profit 1,334,640 Selling and Marketing Expenses: Salesroom Utilities and Fuel 6,491 Shipping Costs 42,893 Salesroom Building Depreciation 48,600 Promotional Materials 120,283 Salesroom Property Taxes and Insurance 65,283 Advertising 71,852 Salespeople Travel 92,788 Sales Staff Commissions 249,133 Less total Selling and Marketing Expenses 697,323 Administrative Expenses: Office Equipment Depreciation 8,400 Other Administrative Expenses 11,548 Office Maintenance 38,718 Warehouse Wages 152,817 Administrative Wages 368,000 Less total Administrative Expenses 579,483 Operating Income 57.834Exhibit 6 Activity Cost Pools and Activity Cost Driver Measures for the Year 2020 Activity Cost Pools Description of the Activity Activity Cost Driver Quantity Driver Measures Making Sales Calls Contacting customers by telephone or email, or making visits # of sales calls 215 Sales calls to customers' location and Zoom calls Negotiating Contracts Conducting administrative activities related to negotiating # of hours of negotiation 200 contracts with large, repeat customers Negotiation hours Processing Orders Conducting clerical activities related to processing orders, # of orders 600 Orders including online orders and customer accounting Warehousing Activities Operating the warehouse, including receiving completed Cost of goods sold $1,779,520 goods from the factory, collecting items, and preparing them for shipping, and receiving returns New Customer Identifying potential customers and efforts related to acquiring # of new customers 18 Customers Development * new customers and account setup Shipping Shipping merchandise to customers "FOB destination" and (Pounds shipped X 87,000,000 shipping merchandise returns Distance in miles) Pound miles Post-Sale Customer Handling customer questions and complaints, processing and # of support hours 1,800 Support restocking returned merchandise Support hours Other Assigned all Selling & Administrative expenses that are not Amount of sales dollars $3,1 14,160 associated with the other cost pools above * New customer development is a 0 or 1 variable. The quantity for a specific customer will be 1 if the customer is a new customer (it will be charged the new customer development rate) and 0 if it is not a new customer (it will not be charged the new customer development rate)
