Reference no: EM131766304
Comprehensive Activity-Based Costing Exercise
Advanced Products Corporation has supplied the following data from its activity-based costing system:
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Overhead Costs
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Wages and salaries
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$300,000
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Other Overhead costs
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100,000
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Total Overhead costs
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$400,000
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Activity Cost Pool
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Activity Measure
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Total Activity for the Year
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Supporting direct labor
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# of direct-labor hours
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20,000 DLHs
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Order processing
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# of customer orders
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400 orders
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Customer support
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# of customers
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200 customers
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Other
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This is an organization-sustaining activity
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Not applicable
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Distribution of Resource Consumption Across Activities
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Supporting Direct Labor
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Order Processing
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Customer Support
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Other
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Total
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Wages and salaries
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40%
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30%
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20%
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10%
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100%
|
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Other overhead costs
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30%
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10%
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20%
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40%
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100%
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During the year, Advanced Products completed one order for a new customer, Shenzen Enterprises. This customer did not order any other products during the year. Data concerning that order follow:
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Units ordered
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10 units
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Direct labor-hours
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2 DLHs per unit
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Selling price
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$300 per unit
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Direct materials
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$180 per unit
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Direct labor
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$50 per unit
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Required: Use the template provided, save it to your desktop and then upload and submit your assignment.
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.
3. Prepare a report showing the overhead costs for the order from Shenzhen Enterprises including customer support costs.
4. Prepare a report showing the customer margin for Shenzhen Enterprises.
1. First-stage allocations of overhead costs to the activity cost pools:
2. Computation of activity rates:
3. Computation of the overhead costs for the Shenzhen Enterprises order:
4. The customer margin for Shenzhen Enterprises is computed as follows: