solve all the steps in detail

0.00 300.000 120,000 80,000,000 Production Department Indirect factory wager...* Factory equipment depreciation Factory utilities Factory building loose General Administrative Department Administrative wages and salaries Office equipment depreciation Administrative building leone Marketing Department Marketing wages and stories.. ng expenses. Total overhead cost 400,000 50,000 0 000 51000 250,000 50 000 O 000 1.1.810.000 Results of Interview - Distribution of resource consumption across activity pools Activity Cest Peel Customer Product Order Customer Order Design Relations Other Totale JON SON SON ow ON ON 40 MOO OO 100N Production Department Indirect factory Factory wpment depreciation Factory Factory building General Administrate Department Administrative wages and stories Omen depreciation Admite buildings Marketing Department Marketing and series DO OO OON NOON IOON on BOS Step 2: Assigning costs to activity cost pools Step 3: Computation of Activity Rates Step 4: Assige verhead costs to cost objects Step 5: Prepare Management Reports CIVILY Designing an activity-based cost system Classic Bress Income Statement Year Ended December 31, 2015 Soles $3.300,000 Cost of goods sold Direct materials 1975.000 Direct labour 35250 Manufacturing overhead 1000000 Gross margin 873.750 Selling and administrative expenses Shipping expenses. 65.000 Marketing expenses 300,000 General administrative expenses 50.000 85.000 Operating income basol The company's traditional conting locaties monocuinerhead to product ingeplandente and machine hoone Background: The president of the company, John Towers, is concerned about the company's poor financial results He is concerned that the price for standard stanchions might be too high, but Tom Olafson, the marketing manager, believes competitors may be setting their prices very low, maybe even below cost, in order to increase market share. Mary Johns, the accounting manager, wonders of Gassic Brass is incorrectly calculating the cost of standard stanchions and thinks ABC might help. The new ABC system would supplement rather than replace, the existing cost accounting system, which would continue to be used for external financial reports. The new ABC system would be used to prepare special reports for management decisions such as bidding on new business. Custom He Standard Stam 0.000 S.DOC Det POS.900 7.000 O Standard Stanken This product line dow designers 30.000 swored during the parking up to pre orders Each Monchion was sometime for a L Standard Stanchiene This product line does not require any new design 30.000 units were ordered during the year, making up 600 porete orders Each stonchion requires 35 minutes of machine time for a total of 17.00 machine-hours Custom Compass Housing This is a custom product that requires new design resources There were 400 orders for custom compone housing Orders for this product are placed separately from orders for standard stanchions 3 There were 100 custom designs prepared. One custom design was prepared for each order Since some orders were for more than one unit, a total of uso custom compos housings were produced during the year. A custom compass housing requires on average of machine-hours for a total of 3.500 machine hours Standard Stanchions Custom Compass Housings 15.00 Total S Orect Direct Dnes S| Sex.S00 200 SO 1900 1200 SO Windward Yachts The company placed a total of the order Two orders were for go standard stonchions per order b. One order was for a single custom compass housing unit A total of 07 machine hours were used to fulfill the three customer orders a. The goo standard stonchions required 15 machine hours The custom compass housing required a machine hour 3 Windward Yochts is one of a customers served by Classic Bross Windward Yachts Sales Brico Dructural Det bordo Songs 1800 na CO Steps in the implementation process 1. Identify and define activities, activity cost pools and activity measures 2. Assign overhead costs to activity cost pools 3. Calculate activity rates. 4. Ansign overhead costs to cost objects using the activity rates and activity measures 5. Prepare management reports. Activity Cast Pulsat Clusie Bross Activity Custoel Activity Measure Besonders Number of stones Podu or product desig Order Mamelor Number of Other Elaborating Step 1: The Customer Orders cost pool is assigned all costs of resources that are consumed by taking and processing customer orders, including costs of processing paperwork and any costs involved in setting up machines for specific orders. This is a botch-level activity. The Product Design cost pool is assigned all costs of resources consumed in designing products, The activity measure for this cost pool is the number of products designed. This is a product-level activity The Order Size cost pool is assigned all costs of resources consumed as a consequence of the number of units produced, including the costs of miscellaneous factory supplies, power to run machines, and some equipment depreciation. This is a wit-level activity. The activity measure for this cost poolis machine-hours. The Customer Relations cost pool is assigned all costs associated with maintaining relations with customers, including the costs of sales calls and the costs of entertaining customers. The activity measure for this cost pool is the number of customers the company has on its active customer list. The Customer Relations cost pool represents a customer level activity. The Other cost pool is assigned all overhead costs that are not associated with customer orders, product design, production units, or customer relations. These costs mainly consist of Organization-sustaining costs and the costs of unused, idle capacity. These types of costs should not be assigned to products since they represent resources that are not consumed by products. Production Department Indirect factory wages not be assigned to products since they represent resources that are not consumed by products. 150.000 300,000 90,000 80.000 000 000 Production Department Indirect factory wages Factory equipment depreciation Factory utilities Factory building lease General Administrative Department Administrative wages and salaries Oflice equipment depreciation Administrative building lease Marketing Department Marketing wages and salaries Selling expenses Total overhead cost 400.000 50.000 60.000 S000 250.000 50.000 10.000 Results of interview - Distribution of our sumption across activity Activity Centele Custan Dret Order Cute Order Design Other ON 999) ON Depre ON 386 Et Step 2: Assigning build Step 3: Com of Activity Rates Sty Asignal cost to the StarPropar Menement Report Results of interview - Distribution of resource consum Totals Other Activity Cost Pools Customer Product Order Customer Orders Design Sho Relations 109 os ON 209 80% SON OM S% 201 404 100 100 100 100 NOON 1 (868468 O OW 40% 30% Production Department Indicect factory wages Factory equipment depreciation Factory utilities Factory building leone General Administrative Department Administrative wages and salaries Office equipment depreciation Administrative building lease Marketing Department Marketing wages and solaries....... Selling expenses MOO NOON 100% 104 ON OX 299 ON NOON 30% OM 10% TOOM NOON 609 OS 2014 89 09 ON 701 10% Step 2: Assigning costs to activity cost pools Step 3: Computation of Activity Rates Step 4: Assign overhead costs to cost objects Step 5: Prepare Management Reports 0.00 300.000 120,000 80,000,000 Production Department Indirect factory wager...* Factory equipment depreciation Factory utilities Factory building loose General Administrative Department Administrative wages and salaries Office equipment depreciation Administrative building leone Marketing Department Marketing wages and stories.. ng expenses. Total overhead cost 400,000 50,000 0 000 51000 250,000 50 000 O 000 1.1.810.000 Results of Interview - Distribution of resource consumption across activity pools Activity Cest Peel Customer Product Order Customer Order Design Relations Other Totale JON SON SON ow ON ON 40 MOO OO 100N Production Department Indirect factory Factory wpment depreciation Factory Factory building General Administrate Department Administrative wages and stories Omen depreciation Admite buildings Marketing Department Marketing and series DO OO OON NOON IOON on BOS Step 2: Assigning costs to activity cost pools Step 3: Computation of Activity Rates Step 4: Assige verhead costs to cost objects Step 5: Prepare Management Reports CIVILY Designing an activity-based cost system Classic Bress Income Statement Year Ended December 31, 2015 Soles $3.300,000 Cost of goods sold Direct materials 1975.000 Direct labour 35250 Manufacturing overhead 1000000 Gross margin 873.750 Selling and administrative expenses Shipping expenses. 65.000 Marketing expenses 300,000 General administrative expenses 50.000 85.000 Operating income basol The company's traditional conting locaties monocuinerhead to product ingeplandente and machine hoone Background: The president of the company, John Towers, is concerned about the company's poor financial results He is concerned that the price for standard stanchions might be too high, but Tom Olafson, the marketing manager, believes competitors may be setting their prices very low, maybe even below cost, in order to increase market share. Mary Johns, the accounting manager, wonders of Gassic Brass is incorrectly calculating the cost of standard stanchions and thinks ABC might help. The new ABC system would supplement rather than replace, the existing cost accounting system, which would continue to be used for external financial reports. The new ABC system would be used to prepare special reports for management decisions such as bidding on new business. Custom He Standard Stam 0.000 S.DOC Det POS.900 7.000 O Standard Stanken This product line dow designers 30.000 swored during the parking up to pre orders Each Monchion was sometime for a L Standard Stanchiene This product line does not require any new design 30.000 units were ordered during the year, making up 600 porete orders Each stonchion requires 35 minutes of machine time for a total of 17.00 machine-hours Custom Compass Housing This is a custom product that requires new design resources There were 400 orders for custom compone housing Orders for this product are placed separately from orders for standard stanchions 3 There were 100 custom designs prepared. One custom design was prepared for each order Since some orders were for more than one unit, a total of uso custom compos housings were produced during the year. A custom compass housing requires on average of machine-hours for a total of 3.500 machine hours Standard Stanchions Custom Compass Housings 15.00 Total S Orect Direct Dnes S| Sex.S00 200 SO 1900 1200 SO Windward Yachts The company placed a total of the order Two orders were for go standard stonchions per order b. One order was for a single custom compass housing unit A total of 07 machine hours were used to fulfill the three customer orders a. The goo standard stonchions required 15 machine hours The custom compass housing required a machine hour 3 Windward Yochts is one of a customers served by Classic Bross Windward Yachts Sales Brico Dructural Det bordo Songs 1800 na CO Steps in the implementation process 1. Identify and define activities, activity cost pools and activity measures 2. Assign overhead costs to activity cost pools 3. Calculate activity rates. 4. Ansign overhead costs to cost objects using the activity rates and activity measures 5. Prepare management reports. Activity Cast Pulsat Clusie Bross Activity Custoel Activity Measure Besonders Number of stones Podu or product desig Order Mamelor Number of Other Elaborating Step 1: The Customer Orders cost pool is assigned all costs of resources that are consumed by taking and processing customer orders, including costs of processing paperwork and any costs involved in setting up machines for specific orders. This is a botch-level activity. The Product Design cost pool is assigned all costs of resources consumed in designing products, The activity measure for this cost pool is the number of products designed. This is a product-level activity The Order Size cost pool is assigned all costs of resources consumed as a consequence of the number of units produced, including the costs of miscellaneous factory supplies, power to run machines, and some equipment depreciation. This is a wit-level activity. The activity measure for this cost poolis machine-hours. The Customer Relations cost pool is assigned all costs associated with maintaining relations with customers, including the costs of sales calls and the costs of entertaining customers. The activity measure for this cost pool is the number of customers the company has on its active customer list. The Customer Relations cost pool represents a customer level activity. The Other cost pool is assigned all overhead costs that are not associated with customer orders, product design, production units, or customer relations. These costs mainly consist of Organization-sustaining costs and the costs of unused, idle capacity. These types of costs should not be assigned to products since they represent resources that are not consumed by products. Production Department Indirect factory wages not be assigned to products since they represent resources that are not consumed by products. 150.000 300,000 90,000 80.000 000 000 Production Department Indirect factory wages Factory equipment depreciation Factory utilities Factory building lease General Administrative Department Administrative wages and salaries Oflice equipment depreciation Administrative building lease Marketing Department Marketing wages and salaries Selling expenses Total overhead cost 400.000 50.000 60.000 S000 250.000 50.000 10.000 Results of interview - Distribution of our sumption across activity Activity Centele Custan Dret Order Cute Order Design Other ON 999) ON Depre ON 386 Et Step 2: Assigning build Step 3: Com of Activity Rates Sty Asignal cost to the StarPropar Menement Report Results of interview - Distribution of resource consum Totals Other Activity Cost Pools Customer Product Order Customer Orders Design Sho Relations 109 os ON 209 80% SON OM S% 201 404 100 100 100 100 NOON 1 (868468 O OW 40% 30% Production Department Indicect factory wages Factory equipment depreciation Factory utilities Factory building leone General Administrative Department Administrative wages and salaries Office equipment depreciation Administrative building lease Marketing Department Marketing wages and solaries....... Selling expenses MOO NOON 100% 104 ON OX 299 ON NOON 30% OM 10% TOOM NOON 609 OS 2014 89 09 ON 701 10% Step 2: Assigning costs to activity cost pools Step 3: Computation of Activity Rates Step 4: Assign overhead costs to cost objects Step 5: Prepare Management Reports