Question

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 $350 per unit Direct labor-hours (DLH) 0.5 DLH per unit Direct labor rate $25 per DLH

Distribution of Resource Consumption across Activities

	Direct Labor Support	Order processing	Costomer Support	Other	Total
Wages and Salaries	30%	35%	25%	10%	100%
Other Overhead Costs	25%	15%	20%	40%	100%

During the year, CR Black completed an order for a special optical switch for a new customer, Gucwa Telecom. The customer did not order any other products during the year. Data concerning that order follow:

Data concerning the Calandra Telecom Order

Selling Price	$700 per unit
Units Ordered	100 units
Direct Materials	$350 per unit
Direct Labor-hours (DLH)	0.5 DLH
Direct labor rate	$25 per DLH

3) Prepare a report showing the first-stage allocation of overhead costs to each activity cost pool, and compute the activity rate for each activity cost pool

Please Show all work!!

Answer 1

Direct labor Order Customer processing() support(S) 245000 60000 305000 Other(S) Total(S) 175000 70000 700000 80000 160000 400000 255000 230000 1100000 support(S) Wages and salaries Other overhead cost Total 210000 100000 310000

Activity rate: Estimated overhead(S)| Estimated activity(S) Activity rate(S) Direct labor support Order processing Customer support 31000010000 DLH 3050001500 Order 255000 100 Customer 31 per DLH 610 per order 2550 per customer