2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Chapter 7: Applying Excel Data Manufacturing overhead $500,000 Selling and administrative overhead $300,000 Assembling Units Processing Orders Supporting Customers Other Manufacturing overhead 50% 35% 5% 10% Selling and administrative overhead 10% 45% 25% 20% Total activity 1,000 250 100 units orders customers OfficeMart orders: Customers 1 customer Orders 6 orders Number of filing cabinets ordered in total 80 units Selling price $595 Direct materials $180 Direct labor $50 (a) What is the customer margin under activity-based costing when the number of orders increases to 6? (Enter a loss as a negative amount.) (b) What is the product margin under the traditional costing system when the number of orders increases to 6? (Enter a loss as a negative amount.) (c) Which of the following statements are true? check all that apply 1 If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease. If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease.unanswered If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected.unanswered If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Chapter 7: Applying Excel

Data
Manufacturing overhead	$500,000
Selling and administrative overhead	$300,000

	Assembling Units	Processing Orders	Supporting Customers	Other
Manufacturing overhead	50%	35%	5%	10%
Selling and administrative overhead	10%	45%	25%	20%
Total activity	1,000	250	100
	units	orders	customers

OfficeMart orders:
Customers	1	customer
Orders	6	orders
Number of filing cabinets ordered in total	80	units
Selling price	$595
Direct materials	$180
Direct labor	$50

(a) What is the customer margin under activity-based costing when the number of orders increases to 6? (Enter a loss as a negative amount.)

(b) What is the product margin under the traditional costing system when the number of orders increases to 6? (Enter a loss as a negative amount.)

check all that apply 1

If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease.
If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease.unanswered
If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected.unanswered
If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected.

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