Comprehensive Activity-Based Costing Exercise
Silicon Optics has supplied the following data for use in its activity-based costing system:
Overhead Costs |
|
Wages and salaries | $350,000 |
Other overhead costs | 200,000 |
Total overhead costs | $550,000 |
Activity Cost Pool | Activity Measure | Total Activity |
Direct labor support | Number of direct labor-hours | 10,000 DLHs |
Order processing | Number of orders | 500orders |
Customer support | Number of customers | 100customers |
Other | This is an organization-sustaining activity | Not applicable |
| Distribution of Resource Consumption Across Activities | ||||
| Direct Labor Support | Order Processing | Customer Support | Other | Total |
Wages and salaries | 30% | 35% | 25% | 10% | 100% |
Other overhead costs | 25% | 15% | 20% | 40% | 100% |
During the year, Silicon Optics completed an order for a special optical switch for a new customer, Indus Telecom. This customer did not order any other products during the year. Data concerning that order follow:
Data Concerning the Indus Telecom Order | |
Selling price | $295 per unit |
Units ordered | 100 units |
Direct materials | $264 per unit |
Direct labor-hours | 0.5 DLH per unit |
Direct labor rate | $25 per DLH |
Required:
1. Using Exhibit 7-5 as a guide, prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
2. Using Exhibit 7-6 as a guide. compute the activity rate, for the activity cost pools.
3. Prepare a report showing the overhead costs for the order from Indus Telecom, including customer support costs.
4. Using Exhibit 7- 11 as a guide, prepare a report showing the customer margin for Indus Telecom.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.