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. Required 1 Required 2 Required 3 Required 4 Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Direct Labor Order Customer Support Processing Support Other Totals Wages and salaries Other overhead costs Total cost
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.
![Exercise 7-15 (Static) Comprehensive Activity-Based Costing Exercise [L07-2, LO7-3, L07-4, LO7-5]
Advanced Products Corporation has supplied the following data from its activity-based costing system:
Overhead Costs
Wages and salaries
Other overhead costs
$ 300,000
100,000
$ 400,000
Total overhead costs
Total Activity for
the Year
Activity Measure
Number of direct labor-hours
Activity Cost Pool
Supporting direct labor
Order processing
Customer support
20,000 DLHS
400 orders
Number of customer orders
Number of customers
200 customers
This is an organizatiðn-
sustaining activity
Other
Not applicable
Distribution of Resource Consumption Across Activities
Order
Supporting
Customer
Direct Labor
Processing
Support
Other
Total
Wages and salaries
Other overhead costs
40%
30%
20%
10%
100%
30%
10%
20%
40%
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
Units ordered
10 units
Direct labor-hours
2 DLHS per unit
$ 300 per unit
$ 180 per unit
$ 50 per unit
Selling price
Direct materials
Direct labor](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05917d28-e2cf-446c-93d8-60aae139bb92%2F8cd81391-59f4-4ef3-9fad-941c88c89eca%2Fppjql2b_processed.jpeg&w=3840&q=75)
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