Question

In: Accounting

Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages...

Cancico Communications has supplied the following data for use in its ABC system:
Overhead Costs
  Wages and salaries $ 312,500
  Other overhead costs 170,000
  Total overhead costs $ 482,500
  Activity Cost Pool Activity Measure Total Activity
  Direct labour support   Number of direct labour-hours 5,675 DLHs
  Order processing   Number of orders 500 orders
  Customer support   Number of customers 160 customers
  Other   These costs are not allocated
     to products or customers		 NA               
Distribution of Resource Consumption
across Activity Cost Pools
Direct
Labour
Support		 Order
Processing		 Customer
Support		 Other Total
  Wages and salaries 10 % 45 % 40 % 5 % 100 %
  Other overhead costs 15 % 20 % 20 % 45 % 100 %

     During the year, Cancico Communications completed an order for special telephone equipment for a new customer, HurnTel. This customer did not order any other products during the year. Data concerning that order follow:
  Selling price $ 224 per unit
  Units ordered 215 units
  Direct materials $ 196 per unit
  Direct labour-hours 0.6 DLH per unit
  Direct labour rate $ 31 per DLH
Required:
1.

Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.


    

2.

Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.)


     

3.

Prepare a report showing the overhead costs for the order from HurnTel, including customer support costs. (Round your answers to 2 decimal places.)

  
     

4.

Prepare a report showing the customer margin for HurnTel. (Round your answers to 2 decimal places.)


     

Solutions

Expert Solution

1.

Direct Labor Support Order Processing Customer Support Other Total
Wages and salaries 31250 140625 125000 15625 312500
Other overhead costs 25500 34000 34000 76500 170000
Total cost $ 56750 174625 159000 92125 482500

2.

Activity Cost Pool Activity Cost $ Total Activity Activity Rate $
Direct labor support 56750 5675 10.00 per DLH
Order processing 174625 500 349.25 per order
Customer support 159000 160 993.75 per customer

3.

Activity Cost Pool Activity Rate $ Activity Cost $
Direct labor support 10.00 per DLH 129 1290.00
Order processing 349.25 per order 1 349.25
Customer support 993.75 per customer 1 993.75
Total 2633.00

4.

Sales (215 x $224) 48160.00
Costs:
Direct materials (215 x $196) 42140.00
Direct labor (215 x 0.6 x $31) 3999.00
Direct labor support overhead 1290.00
Order processing overhead 349.25
Customer support overhead 993.75 48772.00
Customer margin $ -612.00

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages and salaries $ 312,500   Other overhead costs 170,000   Total overhead costs $ 482,500   Activity Cost Pool Activity Measure Total Activity   Direct labour support   Number of direct labour-hours 5,675 DLHs   Order processing   Number of orders 500 orders   Customer support   Number of customers 160 customers   Other   These costs are not allocated      to products or customers NA                Distribution of Resource Consumption across Activity Cost Pools Direct...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages and salaries $ 300,000   Other overhead costs 165,000   Total overhead costs $ 465,000   Activity Cost Pool Activity Measure Total Activity   Direct labour support   Number of direct labour-hours 12,300 DLHs   Order processing   Number of orders 500 orders   Customer support   Number of customers 180 customers   Other   These costs are not allocated      to products or customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries $ 300,000 Other overhead costs 165,000 Total overhead costs $ 465,000 Activity Cost Pool Activity Measure Total Activity Direct labour support Number of direct labour-hours 12,300 DLHs Order processing Number of orders 500 orders Customer support Number of customers 180 customers Other These costs are not allocated to products or customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages and salaries $ 267,500   Other overhead costs 152,000   Total overhead costs $ 419,500   Activity Cost Pool Activity Measure Total Activity   Direct labour support   Number of direct labour-hours 7,630 DLHs   Order processing   Number of orders 450 orders   Customer support   Number of customers 110 customers   Other   These costs are not allocated      to products or customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages...
Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs   Wages and salaries $ 305,000   Other overhead costs 167,000   Total overhead costs $ 472,000   Activity Cost Pool Activity Measure Total Activity   Direct labour support   Number of direct labour-hours 12,490 DLHs   Order processing   Number of orders 500 orders   Customer support   Number of customers 180 customers   Other   These costs are not allocated      to products or customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour...
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages...
Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries $ 300,000 Other overhead costs 100,000 Total overhead costs $ 400,000 Activity Cost Pool Activity Measure Total Activity for the Year Supporting direct labor Number of direct labor-hours 20,000 DLHs Order processing Number of customer orders 400 orders Customer support Number of customers 200 customers Other This is an organization- sustaining activity Not applicable Distribution of Resource Consumption Across Activities Supporting Direct...
Silicon Optics has supplied the following data for use in its activity-based costing system:      Overhead...
Silicon Optics has supplied the following data for use in its activity-based costing system:      Overhead Costs   Wages and salaries $ 343,000   Other overhead costs 194,000   Total overhead costs $ 537,000      Activity Cost Pool Activity Measure Total Activity   Direct labor support Number of direct labor-hours 12,000 DLHs   Order processing Number of orders 570 orders   Customer support Number of customers 100 customers   Other This is an organization-sustaining activity Not applicable    Distribution of Resource Consumption Across Activities Direct Labor Support...
CR Black has supplied the following data for use in its activity based costing system: Overhead...
CR Black has supplied the following data for use in its activity based costing system: Overhead Costs: Wages and Salaries $ 700,000 Other Overhead Costs $ 400,000 Total Overhead Costs $1,100,000 Activity Cost Pool: Direct Labor Support Order Processing Customer Support Other Activity Measure: Number of direct labor-hours Number of orders Number of Customers This is an organizationSustaining activity Total Activity: 10,000 DLHs 500 Orders 100 customers Not applicable Selling Price $700 per unit Units Ordered 100 units Direct materials...
Equally Accurate Reduced ABC System Silven Company has identified the following overhead activities, costs, and activity...
Equally Accurate Reduced ABC System Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $126,000 Number of setups 150 Ordering materials 18,000 Number of orders 900 Machining 126,000 Machine hours 10,500 Receiving 30,000 Receiving hours 1,250 Silven produces two models of cell phones with the following expected activity demands: Model X Model Y Units completed 5,000 10,000 Number of setups 100 50 Number...
Bennette Corporation has provided the following data concerning its overhead costs for the coming year:  ...
Bennette Corporation has provided the following data concerning its overhead costs for the coming year:     Wages and salaries $ 440,000 Depreciation   170,000 Rent   190,000 Total $ 800,000   The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year: Activity Cost Pool Total Activity Assembly 30,000 labor-hours Order processing 550 orders Other Not applicable   The Other activity cost pool does not have a measure of...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT