Advanced Products Corporation supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries Other overhead costs Total overhead costs $ 300,000 100,000 $ 400,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Advanced Products Corporation 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.
$ 300,000
100,000
$ 400,000
Activity Measure
Number of direct labor-hours
Number of customer orders
Number of customers
Direct labor-hours
selling price
Direct materials
Direct labor
This is an organization-
sustaining activity
Labor
40%
30%
Distribution of Resource Consumption Across Activities
Supporting Direct Order
Customer
Support
20%
20%
Data Concerning the Shenzhen Enterprises Order
Units ordered
10 units.
2 DLHS per unit
Total Activity for the
Year
20,000 DLHS
Processing
30%
10%
$ 300 per unit
$ 180 per unit
$50 per unit
400 orders
280 customers
Not applicable
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:
Other
10%
40%
Total
100%
100%
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.
Transcribed Image Text:Advanced Products Corporation 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. $ 300,000 100,000 $ 400,000 Activity Measure Number of direct labor-hours Number of customer orders Number of customers Direct labor-hours selling price Direct materials Direct labor This is an organization- sustaining activity Labor 40% 30% Distribution of Resource Consumption Across Activities Supporting Direct Order Customer Support 20% 20% Data Concerning the Shenzhen Enterprises Order Units ordered 10 units. 2 DLHS per unit Total Activity for the Year 20,000 DLHS Processing 30% 10% $ 300 per unit $ 180 per unit $50 per unit 400 orders 280 customers Not applicable 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: Other 10% 40% Total 100% 100% 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.
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