Advanced Products Corporation has supplied the following data from its activity-based costing system: ...
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Accounting
Advanced Products Corporation has supplied the following data from its activity-based costing system:
Overhead Costs
Wages and salaries
$
600,000
Other overhead costs
500,000
Total overhead costs
$
1,100,000
Activity Cost Pool
Activity Measure
Total Activity
Supporting direct labor
Number of direct labor-hours
10,000
DLHs
Order processing
Number of customer orders
500
orders
Customer support
Number of customers
100
customers
Other
This is an organization-sustaining activity
Not applicable
Distribution of Resource Consumption Across Activities
Direct Labor Support
Order Processing
Customer Support
Other
Total
Wages and salaries
20
%
30
%
20
%
30
%
100
%
Other overhead costs
20
%
20
%
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 Order
Units ordered
70
units
Direct labor-hours
0.6
DLH per unit
Selling price
$
305
per units
Direct materials
$
276
per unit
Direct labor
$
22
per DLH
Required:
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. (Round your answers to 2 decimal places.)
3.
Prepare a report showing the overhead costs for the order from Shenzhen Enterprises including customer support costs. (Round your intermediate calculations to 2 decimal places.)
4.
Prepare a report showing the customer margin for Shenzhen Enterprises.
5.
Prepare an action analysis report showing the customer margin for Shenzhen Enterprises. Direct materials should be coded as a Green cost, direct labor and wages and salaries as Yellow costs, and other overhead costs as a Red cost.
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