Chapter 7: (Algo) Applying Excel: Exercise (Part 2 of 2)

2. Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 21. (Prior to completing this requirement, change all worksheet figures back to their original amounts.)

(a) What is the customer margin under activity-based costing when the number of orders increases to 21? (Enter a loss as a negative amount.)

(b) What is the product margin under the traditional costing system when the number of orders increases to 21? (Enter a loss as a negative amount.

(c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

check all that apply 1

• If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease.
• If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease.
• If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected.
• If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected.