Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries Other overhead costs Total overhead costs. Activity Cost Pool Supporting direct labor Order processing Customer support Other Wages and salaries Other overhead costs Distribution of Resource Consumption Across Activities Supporting Direct $ 300,000 100,000 $ 400,000 Data Concerning the Shenzhen Units ordered Direct labor-hours Selling price Direct materials Direct labor Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization- sustaining activity Labor 40% 30% Required 1 Required 2 Enterprises Order 10 units 2 DLHS per unit $ 300 per unit $ 180 per unit $50 per unit Order Processing 30% 10% During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order a other products during the year. Data concerning that order follow: Required 3 Total Activity for the Year Required 4 20,000 DLHS Complete this question by entering your answers in the tabs below. 400 orders 200 customers Not applicable Customer Support 20% 20% 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. 3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. 4. Calculate the customer margin for Shenzhen Enterprises. Q Search Other 10% 40% Total 100% 100% Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Prev 1 of 1 ly Next >
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries Other overhead costs Total overhead costs. Activity Cost Pool Supporting direct labor Order processing Customer support Other Wages and salaries Other overhead costs Distribution of Resource Consumption Across Activities Supporting Direct $ 300,000 100,000 $ 400,000 Data Concerning the Shenzhen Units ordered Direct labor-hours Selling price Direct materials Direct labor Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization- sustaining activity Labor 40% 30% Required 1 Required 2 Enterprises Order 10 units 2 DLHS per unit $ 300 per unit $ 180 per unit $50 per unit Order Processing 30% 10% During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order a other products during the year. Data concerning that order follow: Required 3 Total Activity for the Year Required 4 20,000 DLHS Complete this question by entering your answers in the tabs below. 400 orders 200 customers Not applicable Customer Support 20% 20% 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. 3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. 4. Calculate the customer margin for Shenzhen Enterprises. Q Search Other 10% 40% Total 100% 100% Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Prev 1 of 1 ly Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Transcribed Image Text:Advanced Products Corporation has supplied the following data from its activity-based costing system:
**Overhead Costs**
- Wages and salaries: $300,000
- Other overhead costs: $100,000
- Total overhead costs: $400,000
**Activity Cost Pool Information:**
| Activity Cost Pool | Activity Measure | Total Activity for the Year |
|---------------------|-----------------------------|-----------------------------|
| Supporting direct labor | Number of direct labor-hours | 20,000 DLHs |
| Order processing | Number of customer orders | 400 orders |
| Customer support | Number of customers | 200 customers |
| Other | This is an organization-sustaining activity | Not applicable |
**Distribution of Resource Consumption Across Activities:**
| | Supporting Direct Labor | Order Processing | Customer Support | Other | Total |
|----------------------|-------------------------|------------------|-----------------|-------|-------|
| Wages and salaries | 40% | 30% | 20% | 10% | 100% |
| Other overhead costs | 30% | 20% | 40% | 10% | 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:**
- Number of units: 1,000 units
- Direct labor-hours: 2 DLHs per unit
- Selling price: $300 per unit
- Direct materials: $180 per unit
- Direct labor: $50 per unit
**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.
3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs.
4. Calculate the customer margin for Shenzhen Enterprises.
Complete this question by entering your answers in the tabs below.
The exercise requires organizing overhead costs into cost pools, computing activity rates, and analyzing a specific customer order.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1: Explain the concept of Activity Based Costing:
VIEWStep 2: (1) Prepare a report showing the first-stage allocations of overhead costs to activity cost pools:
VIEWStep 3: (2) Compute the activity rates for the activity cost pools:
VIEWStep 4: (3) Calculate the total overhead costs for the order from Shenzhen Enterprises:
VIEWStep 5: (4) Calculate the customer margin for Shenzhen Enterprises:
VIEWSolution
VIEW
Trending now
This is a popular solution!
Step by step
Solved in 6 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education