Taylors Cheesecakes supplies cheesecakes to three large supermarket chains. Management has become concerned about the rising costs
Question:
Taylors Cheesecakes supplies cheesecakes to three large supermarket chains. Management has become concerned about the rising costs associated with the processing and dispatch of orders. An activity analysis of the indirect costs identified the following customer related costs.
* Expressed in units of measure of the driver. Sales are marked up 50% on costs.
Required.
a. Calculate the activity cost rate for each activity.
b. Assign the activity costs to each of the three customers.
c. Calculate the contribution margin for each customer if the sales pattern for each is as follows: Customer 1 – PGK300,000.00; Customer 2 – PGK150,000.00; Customer 3 – PGK200,000.00.
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver