Silicon Optics has supplied the following data for use in its activity-based costing system: During the year,
Question:
During the year, Silicon Optics completed an order for a special optical switch for a new customer, Indus Telecom. This customer did not order any other products during the year. Data concerning that order follow:
Data Concerning the Indus Telecom Order
Selling price . . . . . . . . . . . . . . . $295 per unit
Units ordered . . . . . . . . . . . . . . 100 units
Direct materials . . . . . . . . . . . . $264 per unit
Direct labor-hours . . . . . . . . . . 0.5 DLH per unit
Direct labor rate . . . . . . . . . . . . $25 per DLH
Required:
1. Using Exhibit 85 as a guide, prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
2. Using Exhibit 86 as a guide, compute the activity rates for the activity cost pools.3. Prepare a report showing the overhead costs for the order from Indus Telecom, including customer support costs.
4. Using Exhibit 811 as a guide, prepare a report showing the customer margin for IndusTelecom.
Step by Step Answer:
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer