Q2. (Garrison) Ferris Corporation makes a single product-a fire-resistantcommercial filing cabinet-that it sells to office furniture distributors. Thecompany has a simple ABC system that it uses for internal decision making.The company has two overhead departments whose costs are listed on thefollowings:Manufacturing overhead$500,000Selling and administrative overhead300,000Total overhead costs$800,000The company' s ABC system has the following activity cost pools andactivity measures Activity Cost PoolActivity MeasureAssembling unitsNumber of unitsProcessing orders .Number of ordersSupporting customersNumber of customersOtherNot applicableCosts assigned to the "Other" activity cost pool have no activity measure;they consist of the costs of unused capacity and organization-sustainingcosts-neither of which are assigned to orders, customers, or the product.Ferris Corporation distributes the costs of manufacturing overhead and sellingand administrative overhead to the activity cost pools based on employeeinterviews, the results of which are reported below:Distribution of Resource Consumption Across Activity Cost PoolsAssemblingProcessingSupportingOtherTotalUnitsOrdersCustomersManufacturing overhead50%35%5%10%100%Selling and administrativeoverhead10%45%25%20%100%Total activity1,000250100unitsorderscustomersRequired:1. Compute activity rates for the activity cost pools2. OfficeMart is one of Ferris Corporation' s customers. Last year, OfficeMartordered filing cabinets four different times. OfficeMart ordered a total of 80filing cabinets during the year. Construct a table showing the overhead costsattributable to OfficeMart.3. The selling price of a filing cabinet is $595. The cost of direct materials is$180 per filing cabinet, and direct labor is $50 per filing cabinet. What is thecustomer margin of OfficeMart?

a). Computation activity rate for the activity cost pools :- Allocation of Overhead Costs to the…

Q2. (Garrison) Ferris Corporation makes a single product-a fire-resistant commercial filing cabinet-that it sells to office furniture distributors. The company has a simple ABC system that it uses for internal decision makir The company has two overhead departments whose costs are listed on th followings: Manufacturing overhead $500,000 Selling and administrative overhead 300,000

Q2. (Garrison) Ferris Corporation makes a single product-a fire-resistant commercial filing cabinet-that it sells to office furniture distributors. The company has a simple ABC system that it uses for internal decision makir The company has two overhead departments whose costs are listed on th followings: Manufacturing overhead $500,000 Selling and administrative overhead 300,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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