Question 2

Shadow Awnings makes custom awnings for homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity cost pools:

Overhead Costs:

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:

Required:

a) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below

b) Compute the activity rates (i.e., cost per unit of activity) for the Making Awnings and Job Support activity cost pools by filling in the table below

c) Prepare an income report in good form of a job that involves making 80 meters of awnings and has direct materials and direct labour cost of $3,000. The sales revenue from this job is $4,000.