On Bored has supplied the following data for use in its ABC system Overhead Costs Cost Wages
Question:
“On Bored” has supplied the following data for use in its ABC system
Overhead Costs | Cost |
Wages and Salaries | $262,500.00 |
Other Overhead Costs | $150,000.00 |
Total Overhead Costs | $412,500.00 |
Activity Cost Pool | Activity Measure | Total Activity for the Year |
Direct labour support | Num of Direct Labour Hours | 7,500 DLH |
Order Processing | Num of Orders | 500 orders |
Customer Support | Num of Customers | 120 customers |
Other | costs not allocated to products or customers | N/A |
Distribution of Resource Consumption Across Activities | |||||
Direct Labour Support | Order Processing | Customer Support | Other | Total | |
Wages and Salaries | 20.00% | 40.00% | 30.00% | 10.00% | 100.00% |
Other Overhead Costs | 15.00% | 25.00% | 25.00% | 35.00% | 100.00% |
During the year, On Bored completed the order for special telephone equipment for one of its customers, Procrastinet. This customer did not order any other products during the year. Data concerning the order was as follows:
Data concerning Procrastinet's Order | ||
Units Ordered | 115 | units |
Direct Labour-Hours | $.0.6 | DLHs per unit |
Selling Price | $220.00 | per unit |
Direct Materials | $195.00 | per unit |
Direct Labour Rate | $22.00 | per direct labour hour |
Using the above data, complete the following in regards to On Bored:
- Prepare report showing first-stage allocations of overhead costs to the activity cost pools.
- Compute the activity rates for the activity cost pools.
- Prepare a report showing the overhead costs for the order from Procrastinet.
- Prepare a report showing the product margin for the order and the customer margin for Procrastinet.
Make sure to show ALL work! A majority of the marks are based on the work, not the final answer. To receive full credit for each question, you must show your work and round your final answers to 2 decimal points correctly.
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen