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What is the cost of the supporting assembly activity

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Reference no: EM132788057

Question - The activity-based costing (ABC) system at company A include:

Activity Cost Pool Activity Measure Activity Rate

Supporting assembly Direct labor-hours (DLHs) Dh5.50 per DLH

Processing batches Number of batches Dh176.30 per batch

Processing orders Number of orders Dh85.20 per order

Serving customers Number of customers Dh1,039.00 per customer

The cost of serving customers, Dh1,039.00 per customer, is the cost of serving a customer for one year.

Company B buys a product from Company A at Dh18.05 per unit and purchase a total of 1,100 units in 2 orders. For company A to complete the orders, company A needs 8 batches with the following information:

Direct materials cost is Dh6.20 per unit

Direct labor cost is Dh5.70 per unit

Each unit requires 0.30 DLHs

Required -

a) According to the ABC system, what is the cost of the "Supporting assembly" activity for Oelschlaeger Corporation for the year?

b) According to the ABC system, what is the cost of the "Processing batches" activity for Oelschlaeger Corporation for the year?

c) According to the ABC system, what is the cost of the "Processing orders" activity for Oelschlaeger Corporation for the year?

d) According to the ABC system, what is the cost of the "Servicing customers" activity for Oelschlaeger Corporation for the year?

e) What is the customer margin on sales to Oelschlaeger Corporation for the year?

Reference no: EM132788057

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