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Sarasota Products Corporation has supplied the following data for its activity-based costing: Total overhead cost of operating the company for the year: Wages and salaries
Sarasota Products Corporation has supplied the following data for its activity-based costing: Total overhead cost of operating the company for the year: Wages and salaries $ 560,000 Other overhead costs 250,000 Total overhead costs $ 810.000 Activity Activity Cost Pool: Measure Activity for the Year Volume related Direct labour hours 25,000 Direct labour hours Order related Customer orders 500 Customer orders Customer support Customers 400 Customers Other `None Not applicable Distribution of Resource Consumption Across Activity Cost Pools Volume Order Customer Related Related Support Other Totals Wages and salaries 40% 30% 20% 10% 100% Other overhead costs 30% 10% 20% 40% 100% During the year, Sarasota Products completed one order for a new customer, Moslin Enterprises. This customer did not order any other products during the year. Data concerning that order follow:Units ordered 40 units Direct labour hours 1.5 per unit Selling price 450 per unit Direct materials 190 per unit Direct labour 55 per unit Required: a) Complete the first stage allocation of overhead costs to the activity cost pools and calculate the activity rates. b) Determine the overhead costs for the Moslin Enterprises order c) Calculate the customer margin for Moslin Enterprises
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