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Advanced Products Corporation has supplied the following data from its activity-based costing system:
Overheard Cost
Wages and salaries................................$300,000Other overhead costs.............................100,000Total overhead costs............................$400,000Activity Cost Pool Activity Measure Total Activity for the YearSupporting direct labor...Numbers of direct labor-hours 20,000 DLHsOrder processing......................Number of customer orders 400 ordersCustomer support.................. Number of customers 200 customersOther.............................................. This is an organization sustain activity Not applicable
Distribution of Resources Consumption across ActivitiesSupporting Order CustomerDirect Labor processing Other TotalWages and salaries 40% 30% 20% 10% 100%Other overhead costs 30% 10% 20% 40% 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 OrderUnits order........................................... 10 unitsDirect labor-hours............................... 2 DLHs per unitSelling price........................................... $300 per unitDirect materials.................................. $180 per unitDirect labor......................................... $50 per unit
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.
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