Question: 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
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 Office e pense Total $150,000 $100,000 $250,000 Distribution of resource consumption Activitat Pools Making Awning Support Production owerhead 45% 40% Office expense 69% Other 15% 27% Total 100% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Making Awnings Job Support Other Annual Atits 5.000 metres 200 jobs Not applicable Required: a) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below (4 Marks): Produd Office b) Compute the activity rates (i.e., cost per unit of activity) for the Making Awnings and Job Support activity cost pools by filling in the table below (3 Marks): Making Awnings Production Overhead Office Expense Total c) Prepare an income report in good form of a job that involves making 80 meters of awnings and has direct materials and direct labour cost of $3,000. The sales revenue from this job is $4,000
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