Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following...
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Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following data from its activity-based costing system: Overhead Costs Staff Salaries Selling and administration overheads Total Overhead Costs Activity Cost Pool Product design Order Processing Customer Support Others Staff Salaries Selling and administration overheads Selling price Direct materials Direct labor Order 1 Order 2 Order 3 Required: $500,000 200,000 $700,000 Product Design 40% 30% Activity Measure Number of new designs Number of Customer orders Number of Customers Organization sustaining activity Distribution of Resource Consumption across Activities Order Other Processing 30% 10% Total Activity for the Year 500 new designs 700 orders 400 customers Not applicable Customer Support 20% 20% Orange Tangerine $700 per unit $280 per unit $100 per unit 10% 40% During the year Sunshine Company completed three individual orders for a new customer, Tarpaper Inc. Two different designs of surfboards were prepared for and sold to this new customer - Orange Tangerine and Blue Waves. Data concerning the two designs and customer orders are as follows: Blue Waves $500 per unit $180 per unit $50 per unit Total 10 units of Orange Tangerine 20 units of Blue Waves 15 units of Orange Tangerines and 15 units of Blue Waves 100% 100% a. Prepare a report showing the first-stage allocation of overhead costs to the respective activity cost pools. b. Calculate the activity rates for the activity cost pools. c. Prepare a report showing the overhead costs for the orders from Tarpaper Inc. including customer support costs. d. Prepare a report showing the customer margin for Tarpaper Inc. Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following data from its activity-based costing system: Overhead Costs Staff Salaries Selling and administration overheads Total Overhead Costs Activity Cost Pool Product design Order Processing Customer Support Others Staff Salaries Selling and administration overheads Selling price Direct materials Direct labor Order 1 Order 2 Order 3 Required: $500,000 200,000 $700,000 Product Design 40% 30% Activity Measure Number of new designs Number of Customer orders Number of Customers Organization sustaining activity Distribution of Resource Consumption across Activities Order Other Processing 30% 10% Total Activity for the Year 500 new designs 700 orders 400 customers Not applicable Customer Support 20% 20% Orange Tangerine $700 per unit $280 per unit $100 per unit 10% 40% During the year Sunshine Company completed three individual orders for a new customer, Tarpaper Inc. Two different designs of surfboards were prepared for and sold to this new customer - Orange Tangerine and Blue Waves. Data concerning the two designs and customer orders are as follows: Blue Waves $500 per unit $180 per unit $50 per unit Total 10 units of Orange Tangerine 20 units of Blue Waves 15 units of Orange Tangerines and 15 units of Blue Waves 100% 100% a. Prepare a report showing the first-stage allocation of overhead costs to the respective activity cost pools. b. Calculate the activity rates for the activity cost pools. c. Prepare a report showing the overhead costs for the orders from Tarpaper Inc. including customer support costs. d. Prepare a report showing the customer margin for Tarpaper Inc.
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a Description Total Product Design Order Processing Customer Support Other Staff Salaries 4 3 2 1 50... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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