Question No.4 Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to office furniture distributors. The company has simple ABC system that it use for internal decision making. The company has two overheads departments whose costs are listed below; Manufacturing Over head $ 500,000 Selling & Admin overhead $ 300,000 Total overhead Costs $ 800,000 The company ABC’s system has the following activity cost pools and activity measures; Activity Costs Pool Activity Measures Assembling Units……………………… Number of Units Processing Order ……………………… Number of Orders Supporting Customer …………………. Number of Customers Others…………………………………. Not applicable Costs assigned to the “others” activity cost pool have no activity measures; they consist of the costs of unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or customers. The company distribute the cost of manufacturing overhead and selling admin overhead to the activity cost pools based on employees interviews, the results of which are reported below: Distribution of Resource Consumption Across Activity Cost pools Assembling UnitsProcessing OrdersSupporting CustomersOthersTotalManufacturing Overhead50%35%05%10%100%Selling & Admin overhead10%45%25%20%100%Total Activity1000 units250 orders100 customers Required Perform the 1st stage allocation of overhead costs to the activity cost pools.Compute the activity rates for the activity costs pools.Office mart is one of ferris corporation’s customer, last year office mart ordered filling cabinets four different times , office mart ordered a total of 100 filing cabinets during the years, overhead cost of these, 100 units and five orders.The selling price of a filling cabinet $ 595, the cost of direct materials is $ 180 per filing cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100 filling cabinets ordered by office mart? How profitable is office mart as a customer?Note :just solve part 4. Question No.4Feri Corporation makes a single product. A fire resistant commercial filing cabinet that it sells tooffice furniture distributors. The company has simple ABC system that it use for internal decisionmaking. The company has two overheads departments whose costs are listed below;Manufacturing Over headSelling & Admin overheadTotal overhead CostsS 500,000S300.000The company ABC's system has the following activity cost pools and activity measures,Activity Costs PoolAssembling Units.Processing OrderSupporting Customer.Activity MeasuresNumber of UnitsNumber of OrdersNumber of CustomersOthers.Not applicableCosts assigned to the "others" activity cost pool have no activity measures; they consist of the costs ofunused capacity and organization - sustaining cost- neither of which are assigned to products. Ordersor customers.The company distribute the cost of manufacturing overhead and selling admin overhead to the activitycost pools based on employees interviews, the results of which are reported below:Distribution of Resource Consumption Across Activity Cost poolsOthersAssemblingUnits50%Processing SupportingCastomers05%25%100 customersTotalOrdersManufacturing OverheadSelling & Admin overheadTotal Activity35%45%250 onders10%100%10%20%100%1000 unitsRequired1. Perform the 1" stage allocation of overhead costs to the activity cost pools.2. Compute the activity rates for the activity costs pools.3. Office mart is one of ferris corporation's customer, last year office mart ordered filling cabinetsfour different times, office mart ordered a total of 100 filing cabinets during the years,overhead cost of these, 100 units and five orders.4. The selling price of a filling cabinet S 595, the cost of direct materials is $ 180 per filingcabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100filling cabinets ordered by office mart? How profitable is office mart as a customer?

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Question No.4 Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to office furniture distributors. The company has simple ABC system that it use for internal decision making. The company has two overheads departments whose costs are listed below; Manufacturing Over head $ 500,000 Selling & Admin overhead $ 300,000 Total overhead Costs $ 800,000 The company ABC’s system has the following activity cost pools and activity measures; Activity Costs Pool Activity Measures Assembling Units……………………… Number of Units Processing Order ……………………… Number of Orders Supporting Customer …………………. Number of Customers Others…………………………………. Not applicable Costs assigned to the “others” activity cost pool have no activity measures; they consist of the costs of unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or customers. The company distribute the cost of manufacturing overhead and selling admin overhead to the activity cost pools based on employees interviews, the results of which are reported below: Distribution of Resource Consumption Across Activity Cost pools Assembling Units Processing Orders Supporting Customers Others Total Manufacturing Overhead 50% 35% 05% 10% 100% Selling & Admin overhead 10% 45% 25% 20% 100% Total Activity 1000 units 250 orders 100 customers Required Perform the 1st stage allocation of overhead costs to the activity cost pools. Compute the activity rates for the activity costs pools. Office mart is one of ferris corporation’s customer, last year office mart ordered filling cabinets four different times , office mart ordered a total of 100 filing cabinets during the years, overhead cost of these, 100 units and five orders. The selling price of a filling cabinet $ 595, the cost of direct materials is $ 180 per filing cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100 filling cabinets ordered by office mart? How profitable is office mart as a customer?

Question No.4 Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to office furniture distributors. The company has simple ABC system that it use for internal decision making. The company has two overheads departments whose costs are listed below; Manufacturing Over head $ 500,000 Selling & Admin overhead $ 300,000 Total overhead Costs $ 800,000 The company ABC’s system has the following activity cost pools and activity measures; Activity Costs Pool Activity Measures Assembling Units……………………… Number of Units Processing Order ……………………… Number of Orders Supporting Customer …………………. Number of Customers Others…………………………………. Not applicable Costs assigned to the “others” activity cost pool have no activity measures; they consist of the costs of unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or customers. The company distribute the cost of manufacturing overhead and selling admin overhead to the activity cost pools based on employees interviews, the results of which are reported below: Distribution of Resource Consumption Across Activity Cost pools Assembling Units Processing Orders Supporting Customers Others Total Manufacturing Overhead 50% 35% 05% 10% 100% Selling & Admin overhead 10% 45% 25% 20% 100% Total Activity 1000 units 250 orders 100 customers Required Perform the 1st stage allocation of overhead costs to the activity cost pools. Compute the activity rates for the activity costs pools. Office mart is one of ferris corporation’s customer, last year office mart ordered filling cabinets four different times , office mart ordered a total of 100 filing cabinets during the years, overhead cost of these, 100 units and five orders. The selling price of a filling cabinet $ 595, the cost of direct materials is $ 180 per filing cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100 filling cabinets ordered by office mart? How profitable is office mart as a customer?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question No.4

Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to office furniture distributors. The company has simple ABC system that it use for internal decision making. The company has two overheads departments whose costs are listed below;

Manufacturing Over head $ 500,000

Selling & Admin overhead $ 300,000

Total overhead Costs $ 800,000

The company ABC’s system has the following activity cost pools and activity measures;

Activity Costs Pool Activity Measures

Assembling Units……………………… Number of Units

Processing Order ……………………… Number of Orders

Supporting Customer …………………. Number of Customers

Others…………………………………. Not applicable

Costs assigned to the “others” activity cost pool have no activity measures; they consist of the costs of unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or customers.

The company distribute the cost of manufacturing overhead and selling admin overhead to the activity cost pools based on employees interviews, the results of which are reported below:

Distribution of Resource Consumption Across Activity Cost pools

	Assembling Units	Processing Orders	Supporting Customers	Others	Total
Manufacturing Overhead	50%	35%	05%	10%	100%
Selling & Admin overhead	10%	45%	25%	20%	100%
Total Activity	1000 units	250 orders	100 customers

Required

Perform the 1^st stage allocation of overhead costs to the activity cost pools.
Compute the activity rates for the activity costs pools.
Office mart is one of ferris corporation’s customer, last year office mart ordered filling cabinets four different times , office mart ordered a total of 100 filing cabinets during the years, overhead cost of these, 100 units and five orders.
The selling price of a filling cabinet $ 595, the cost of direct materials is $ 180 per filing cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100 filling cabinets ordered by office mart? How profitable is office mart as a customer?

Note :just solve part 4.

Question No.4
Feri Corporation makes a single product. A fire resistant commercial filing cabinet that it sells to
office furniture distributors. The company has simple ABC system that it use for internal decision
making. The company has two overheads departments whose costs are listed below;
Manufacturing Over head
Selling & Admin overhead
Total overhead Costs
S 500,000
S300.000
The company ABC's system has the following activity cost pools and activity measures,
Activity Costs Pool
Assembling Units.
Processing Order
Supporting Customer.
Activity Measures
Number of Units
Number of Orders
Number of Customers
Others.
Not applicable
Costs assigned to the "others" activity cost pool have no activity measures; they consist of the costs of
unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders
or customers.
The company distribute the cost of manufacturing overhead and selling admin overhead to the activity
cost pools based on employees interviews, the results of which are reported below:
Distribution of Resource Consumption Across Activity Cost pools
Others
Assembling
Units
50%
Processing Supporting
Castomers
05%
25%
100 customers
Total
Orders
Manufacturing Overhead
Selling & Admin overhead
Total Activity
35%
45%
250 onders
10%
100%
10%
20%
100%
1000 units
Required
1. Perform the 1" stage allocation of overhead costs to the activity cost pools.
2. Compute the activity rates for the activity costs pools.
3. Office mart is one of ferris corporation's customer, last year office mart ordered filling cabinets
four different times, office mart ordered a total of 100 filing cabinets during the years,
overhead cost of these, 100 units and five orders.
4. The selling price of a filling cabinet S 595, the cost of direct materials is $ 180 per filing
cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100
filling cabinets ordered by office mart? How profitable is office mart as a customer?

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