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Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. 2. Compute the activity rates for the activity
Required: | |
1. | Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. |
2. | Compute the activity rates for the activity cost pools. (Round the "Direct labor support" to 2 decimal places.) |
3. | Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. |
4. | Calculate the customer margin for Shenzhen Enterprises. |
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries Other overhead costs Total overhead costs $ 300,000 100,000 $ 400,000 Activity Cost Pool Supporting direct labor Order processing Customer support Other Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization- sustaining activity Total Activity for the Year 20,000 DLHs 400 orders 200 customers Not applicable Distribution of Resource Consumption Across Activities Supporting Order Direct Labor Processing Wages and salaries 40% 30% Other overhead costs 30% 10% Customer Support 20% 20% Other 10% 40% Total 100% 100% During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order follow: Data Concerning the Shenzhen Enterprises Order Units ordered 10 units Direct labor-hours 2 DLHs per unit Selling price $ 300 per unit Direct materials $ 180 per unit Direct labor $ 50 per unit
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