(a) Based on new number of orders in Requirement 2, what is the customer margin under activity-based costing when the data are corrected?(Enter a loss as a negative amount.)
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Customer margin under activity-based costing |
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I got $(7,840) but it was incorrect. :(
(b) Based on new number of orders in Requirement 2, what is the product margin under the traditional costing system when the data are corrected?(Enter a loss as a negative amount.)
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Product margin under the traditional costing system |
$(10,800) |
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I got $(10,800) and it was correct. :)
(c) Which of the following statements are true about what happens when the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount?(You may select more than one answer.)
check all that apply
- When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, costs are shifted from the processing orders cost pool to the supporting customers cost pool.
- When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, costs will be shifted from customers who order more frequently to those who order less frequently.
- When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, the customer margins of those who order more frequently will increase relative to the customer margins of those who order less frequently.
Extracted text: 3. OfficeMart has found an error in its data. The percentage of selling and administrative overhead attributable to processing orders should be changed to 35% from 45% and the percentage attributable to supporting customers should be changed to 35% from 25%. A В C D E 1 Chapter 7: Applying Excel Data 4 Manufacturing overhead 500,000 5 Selling and administrative overhead 300,000 Assembling Processing Supporting Customers 7 Other Units Orders 8 Manufacturing overhead 50% 35% 5% 10% 9. Selling and administrative overhead 10% 35% 35% 20% 10 Total activity 1,000 250 100 11 units orders customers 12 13 OfficeMart orders: 14 Customers 1 customer 15 Orders 11 orders 16 Number of filing cabinets ordered in total 80 units 17 Selling price 595 18 Direct materials $ 180 19 Direct labor 50 %24
Extracted text: 1 Chapter 7: Applying Excel 2 3 Data 4 Manufacturing overhead 5 Selling and administrative overhead $500,000 $300,000 6 Assembling Processing Supporting 7 Units Orders Customers Other 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 50% 35% 5% 10% 10% 45% 25% 20% 1,000 250 100 11 units orders customers 12 13 OfficeMart orders 14 Customers 15 Orders 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 1 customer 4 orders 160 units $595 $180 $50 19 Direct labor 20 21 Enter a formula into each of the cells marked with a ? below 22 Review Problem: Activity-Based Costing 23 24 Perform the first stage allocations Assembling Processing Supporting Orders 2$ Total 2$ 25 Units Customers Other ##HHHH $ 50,000 $ 250,000 30,000 $ 280,000 175,000 26 Manufacturing overhead 27 Selling and administrative overhead 28 Total cost 500,000 75,000 $ 100.000 135,000 60,000 300,000 2$ 310,000 $ 110.000 800,000 29 30 Compute the activity rates 31 Activity Cost Pools 32 Assembling units 33 Processing orders 34 Supporting customers Activity Rate $280 per unit $1,240 per order $1,000 per customer Total Cost Total Activity $ 280.000 $ 310,000 $ 100,000 1,000 units 250 orders 100 customers 35 36 Compute the overhead cost attributable to the OfficeMart orders 37 Activity Cost Pools 38 Assembling units 39 Processing orders 40 Supporting customers АВС Cost Activity Rate $280 per unit $1,240 per order $1,000 per customer Activity $44,800 $4,960 160 units 4 orders 1 customer $1,000 41 42 Determine the customer margin for the OfficeMart orders under Activity-Based Costing 43 Sales $ 95,200 44 Costs: 45 Direct materials $ 28,800 46 Direct labor 8,000 47 Unit-related overhead 44,800 48 Order-related overhead 4,960 49 Customer-related overhead 1,000 87,560 50 Customer margin 7.640 51 52 Determine the product margin for the OfficeMart orders under a traditional cost system 53 Manufacturing overhead 54 Total activity $500,000 1,000 units 55 Manufacturing overhead per unit $500 per unit 56 57 Sales 58 Costs: $ 95,200 59 Direct materials $ 28,800 60 Direct labor 8,000 61 Manufacturing overhead 62 Traditional costing product margin 80,000 116,800 $ (21,600) 63