Question

Download the Applying Excel form and enter formulas in all cells that contain question marks.

For example, in cell B26 enter the formula “= B4*B8”.

Note that the worksheet contains a section at the bottom titled “Determine the Product Margin Under a Traditional Cost System” that is not in the Review Problem. In this section, it is assumed that the traditional costing system allocates manufacturing overhead on the basis of the number of units produced. When completed, that part of the worksheet should contain the following results:

52	Determine the product margin for the OfficeMart orders under a traditional cost system
53	Manufacturing overhead	$	500,000
54	Total activity		1,000	units
55	Manufacturing overhead per unit	$	500	per unit
56
57	Sales			$	47,600
58	Costs:
59	Direct materials	$	14,400
60	Direct labor		4,000
61	Manufacturing overhead		40,000		58,400
62	Traditional costing product margin			$	(10,800)
63

After entering formulas in all of the cells that contained question marks, verify that the dollar amounts match the numbers in the Review Problem.

Check your worksheet by doubling the units ordered in cell B16 to 160. The customer margin under activity-based costing should now be $7,640 and the traditional costing product margin should be $(21,600). If you do not get these results, find the errors in your worksheet and correct them.

Save your completed Applying Excel form to your computer and then upload it here by clicking “Browse.” Next, click “Save.” You will use this worksheet to answer the questions in Part 2.

Chapter 7: Applying Excel
Data
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
Review Problem: Activity-Based Costing
Perform the first stage allocations
	Assembling Units	Processing Orders	Supporting Customers	Other	Total
Manufacturing overhead	?	?	?	?	?
Selling and administrative overhead	?	?	?	?	?
Total cost	?	?	?	?	?
Compute the activity rates
Activity Cost Pools	Total Cost	Total Activity		Activity Rate
Assembling units	?	?	units	?	per unit
Processing orders	?	?	orders	?	per order
Supporting customers	?	?	customers	?	per customer
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	?
Determine the customer margin for the OfficeMart orders under Activity-Based Costing
Sales		?
Costs:
Direct materials	?
Direct labor	?
Unit-related overhead	?
Order-related overhead	?
Customer-related overhead	?	?
Customer margin		?
Determine the product margin for the OfficeMart orders under a traditional cost system
Manufacturing overhead	?
Total activity	?	units
Manufacturing overhead per unit	?	per unit
Sales		?
Costs:
Direct materials	?
Direct labor	?
Manufacturing overhead	?	?
Traditional costing product margin		?

Answer 1

Chapter 7: Applying Excel Data Manufacturing overhead Selling and administrative overhead 5,00,000.00 ,00,000.00 1 3 Manufacturing overhead Selling and administrative overhead T Total activity Assembling Units Processing Orders Supporting Customers Other 50% 35% 5% 1 0% 45% 25% 1,000 250 100 Junits orders customers 10% 20% OfficeMart orders: Customers Orders Number of filing cabinets ordered in total Selling price Direct materials Direct labor 1 customer 4 orders 160 units $595 $180 $50 Enter a formula into each of the cells marked with a ? below Review Problem: Activity-Based Costing Perform the first stage allocations Total Manufacturing overhead Selling and administrative overhead Total cost Assembling Units 2,50,000.00 30,000.00 2,80,000.00 Processing Orders 1,75,000.00 1,35,000.00 3,10,000.00 Supporting Customers Other 25,000.00 75,000.00 1,00,000.00 50,000.00 60,000.00 1,10,000.00 5,00,000.00 3,00,000.00 8,00,000.00 Total Activity Activity Rate Compute the activity rates Activity Cost Pools Assembling units Processing orders Supporting customers Total Cost 2.80,000.00 3,10,000.00 1,00,000.00 1,000.00 units 250.00 orders 100.00 customers 280.00 per unit 1,240.00 per order 1,000.00 per customer

Activity ABC Cost Compute the overhead cost attributable to the OfficeMart orders Activity Cost Pools Activity Rate Assembling units 280.00 per unit Processing orders 1,240.00 per order Supporting customers 1,000.00 per customer 160.00 units 4.00 orders 1.00 customer 44,800.00 4,960.00 1,000.00 . Determine the customer margin for the OfficeMart orders under Activity-Based Costing Sales 95,200.00 Costs: Direct materials 28,800.00 Direct labor 8,000.00 Unit-related overhead 44,800.00 Order-related overhead 4,960.00 Customer-related overhead 1.000.00 87,560.00 Customer margin 7,640.00 Determine the product margin for the Office Mart orders under a traditional cost system Manufacturing overhead Total activity 160 units Manufacturing overhead per unit 500 per unit 95,200.00 Sales Costs: Direct materials Direct labor Manufacturing overhead Traditional costing product margin 28,800.00 8,000.00 80,000.00 1,16,800.00 -21,600.00