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Poldberg Co. uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and
Poldberg Co. uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity based costing system: Overhead costs: Wages & Salaries Factory Supplies Total Distribution of resource consumption: Activity Cost Pools Wages and salaries Factory Supplies Clean-Up Inspection $806,000 488,000 $1,294,000 The amount of activity for the year is as follows: Activity Cost Pool Activity 1,000 Batches a. Clean-Up 22% 48% 400 Inspections Inspection 60% 20% Other 18% 32% Total 100% 100% How much OVERHEAD cost would be allocated to a "Customer A," who initiated 125 batches and 55 inspections in a year? b. C. Using the following information, set up a Customer Margin Report using Activity Based Costing to determine the profitability of the customer. Customer A $580,000 $230,000 Sales Direct Material Cost Direct Labor Cost Selling Cost $150,000 $80,000 Looking back to your work above, specify the value for each of the following: 1) Total overhead assigned to the Inspection cost pool: 2) Allocation rate for the clean-up cost pool: 3) Total clean-up overhead assigned to the customer: 4) Total inspection overhead assigned to the customer: 5) Total direct costs traced to the customer:
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