Question
In: Accounting
Manufacturing overhead $500,000 Selling and administrative overhead $300,000 Assembling Units Processing Orders Supporting Customers Other Manufacturing...
| Manufacturing overhead | $500,000 | |||
| Selling and administrative overhead | $300,000 | |||
| Assembling Units | Processing Orders | Supporting Customers | Other | |
| Manufacturing overhead | 50% | 35% | 5% | 10% |
| Selling and administrative overhead | 10% | 45% | 25% | 20% |
| Total activity | 1,000 | 250 | 100 | |
| units | orders | customers | ||
| OfficeMart orders: | ||||
| Customers | 1 | customer | ||
| Orders | 4 | orders | ||
| Number of filing cabinets ordered in total | 80 | units | ||
| Selling price | $595 | |||
| Direct materials | $180 | |||
| Direct labor | $50 |
| Compute the overhead cost attributable to the OfficeMart orders | |||||
| Activity Cost Pools | Activity Rate | Activity | ABC Cost | ||
| Assembling units | ? | per unit | ? | units | ? |
| Processing orders | ? | per order | ? | orders | ? |
| Supporting customers | ? | per customer | ? | customer | ? |
Solutions
Expert Solution
The allocation of cost is shown in the following steps :
Step : 1 - First Stage
Allocation
| Assembling Units | Processing Orders | Supporting Customers | Other | Total | |
| Manufacturing overhead | 250000 (50%) | 175000 (35%) | 25000 (5%) | 50000 (10%) | 500000 |
| Selling and administrative overhead | 30000 (10%) | 135000 (45%) | 75000 (25%) | 60000 (20%) | 300000 |
| Total Cost | 280000 | 310000 | 100000 | 110000 | 800000 |
Step : 2 - Computing the Activity Rates
| Activity Cost Pools | Total Cost | Total Activity | Activity Rate |
| Assembling Units | 280000 | 1000 units | 280 per unit |
| Processing Orders | 310000 | 250 orders | 1240 per order |
| Supporting Customers | 100000 | 100 customer | 1000 per customer |
Step : 3 - Computing the Overhead cost attributable to OfficeMart orders
| Activity Cost Pools | Activity Rate | Activity | ABC Cost | ||
| Assembling Units | 280 | per unit | 80 | units | 22400 |
| Processing Orders | 1240 | per order | 4 | orders | 4960 |
| Supporting Customers | 1000 | per customer | 1 | customer | 1000 |
| TOTAL | 28360 | ||||
ekkarill92 answered 3 years agoRelated Solutions
Manufacturing overhead $500,000 Selling and administrative overhead $300,000 Assembling Units Processing Orders Supporting Customers Other Manufacturing...
Manufacturing overhead
$500,000
Selling
and administrative overhead
$300,000
Assembling Units
Processing Orders
Supporting Customers
Other
Manufacturing overhead
50%
35%
5%
10%
Selling
and administrative overhead
10%
45%
25%
20%
Total
activity
1,000
250
100
units
orders
customers
OfficeMart orders:
Customers
1
customer
Orders
4
orders
Number
of filing cabinets ordered in total
80
units
Selling
price
$595
Direct
materials
$180
Direct
labor
$50
Determine the customer margin for the OfficeMart orders
under Activity-Based Costing
Sales
?
Costs:
Direct materials
?...
#NAME? Manufacturing overhead $500,000 Selling and administrative overhead $300,000 Assembling Units Processing Orders Supporting Customers Other...
#NAME?
Manufacturing overhead
$500,000
Selling
and administrative overhead
$300,000
Assembling Units
Processing Orders
Supporting Customers
Other
Manufacturing overhead
50%
35%
5%
10%
Selling
and administrative overhead
10%
45%
25%
20%
Total
activity
1,000
250
100
units
orders
customers
OfficeMart orders:
Customers
1
customer
Orders
4
orders
Number
of filing cabinets ordered in total
80
units
Selling
price
$595
Direct
materials
$180
Direct
labor
$50
Enter a formula into each of the cells marked with a ?
below
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Actual manufacturing overhead $ 550,000
Estimated direct labor hours 10,000 hours
Actual direct labor hours 10,500
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Selling Price After Processing
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$11.00
$15.50
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$14.00
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$18.50
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$8,000
Superior Company manufactures three products using the same
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A company with fixed manufacturing costs of $500,000 produces 100,000 units in 2020 and 125,000 units...
A company with fixed manufacturing costs of $500,000 produces
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This week we focused on manufacturing costs, but selling, general, and administrative (SG&A) costs are also...
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5,000
15,000
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