Question 2 (Total: 30 marks)

Lojay Company produces custom covers for the air conditioning units of homes and businesses. For its overhead costs the company uses an activity-based costing system. The following data has been provided by the Lojay company regarding its annual overhead costs and its activity cost pools:

Overhead Costs:
Production overhead	$89,000
Office expenses	41,500
Total	$130,500

Distribution of Resource Consumption:

	Activity Cost Pools
	Making Covers	Job Support	Other	Total
Production overhead	33%	45%	22%	100%
Office expenses	14%	54%	32%	100%

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:

Activity Cost Pool	Annual Activity
Making covers	2,500 yards
Job support	200 jobs
Other	Not applicable

Required:

1. Prepare the first-stage allocation of overhead costs to the activity cost pools
2. Compute the activity rates for the Making Covers and Job Support activity cost pools
3. Prepare a revenue report where making 50 yards of covers and DM and DL cost of $950, and revenue is $2,500