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this is one question.... Question 2 (Total: 30 marks) Lojay Company produces custom covers for the air conditioning units of homes and businesses. For its
this is one question....
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 Office expenses Total $89,000 41,500 $130,500 Distribution of Resource Consumption: Activity Cost Pools Making Covers Job Support Production overhead 33% 45% Office expenses 14% 54% Other 22% 32% Total 100% 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 $2,500Step by Step Solution
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