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SOLVE ALL QUESTIONS OTHERWISE LEAVE

SOLVE ALL QUESTIONS OTHERWISE LEAVE

FINANCIAL ACCOUNTING
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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SOLVE ALL QUESTIONS OTHERWISE LEAVE
Exercise 7-15 (Static) Comprehensive Activity-Based Costing Exercise [LO7-2, LO7-3, LO7-4, LO7-5] 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% Supporting Direct Distribution of Resource Consumption Across Activities Order Customer Processing 30% 10% Support 20% 20% Data Concerning the Shenzhen Enterprises Order Units ordered Total Activity for the Year 20,000 DLHS 10 units 2 DLHS per unit 400 orders 200 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: $300 per unit $180 per unit $50 per unit 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:Exercise 7-15 (Static) Comprehensive Activity-Based Costing Exercise [LO7-2, LO7-3, LO7-4, LO7-5] 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% Supporting Direct Distribution of Resource Consumption Across Activities Order Customer Processing 30% 10% Support 20% 20% Data Concerning the Shenzhen Enterprises Order Units ordered Total Activity for the Year 20,000 DLHS 10 units 2 DLHS per unit 400 orders 200 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: $300 per unit $180 per unit $50 per unit 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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