Question 2 (12 Marks)

Shadow Awnings makes custom awnings for homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity cost pools:

Overhead Costs:

Production overhead $150,000 Office expense $100.000 Total $250,000 Distribution of resource consumption: Activity Cost Pools Making Job Awnings Support Other Total Production overhead 45% 40% 15% 100% Office expense 8% 65% 27% 100%Activity Cost Pool Annual Activity Making Awnings 5.000 metres Job Support 200 jobs Other Not applicableMaking Job Awnings Support Other Total Production Overhead Office Expense Total