| Customer C | ||
| Ordering cost | 144 | =18*8 |
| General delivery cost | 2400 | =120000*2% |
| Items cost | 2500 | =2000*1.25 |
| Delivery cost | 300 | =10*30 |
| Total Delivery costs | 5344 | |
| Option B $5,344 is correct |
Republic Industries decides to price delivery services according to the results of a recent activity-based costing...
Republic Industries decides to price delivery services according to the results of a recent activity-based costing (ABC) study. The study indicates Republic should charge $9 per order, 3% of annual order value for general delivery costs, $1.20 per item, and $30 for delivery. A year later, Republic collected the following information for two of its best customers: Cost driver Customer C Customer D Number of orders 16 9 Number of deliveries 10 10 Total number of items 2,700 5,400 Annual...
Republic Industries decides to price delivery services according to the results of a recent activity-based costing (ABC) study. The study indicates Republic should charge $7 per order, 2% of annual order value for general delivery costs, $1.40 per item, and $20 for delivery. A year later, Republic collected the following information for two of its best customers: Cost driver Customer C Customer D Number of orders 19 7 Number of deliveries 10 10 Total number of items 2,500 5,000 Annual...
Saved Help Save & E Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Activity Cost Pool (and Activity Measure) Total Cost Machine related machine-hours) $159, 600 Batch setup (setups) $698, 250 Order size (direct labor-hours) $142,600 Total Activity Activity Cost Pools Machine related Batch setup Order size Product X Product Y 1,700 8, 800 4,000 6,500 6,900 4,600 Total 10,500 10,500 11,500 The...
International Gems sells fine jewelry and has implemented activity-based costing. Costs in the shipping department have been divided into three cost pools. The first cost pool contains costs that are related to packaging and shipping. International has determined that the number of boxes shipped is an appropriate cost driver for these costs. The second cost pool is made up of costs related to the final inspection of each item before it is shipped and the cost driver for this pool...
Lysiak Corporation
Lysiak Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs- equipment depreciation and supervisory expense-are allocated to three activity cost pools-Machining. Order Filling, and Other-based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $47,000 Supervisory expense $ 6,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling 0.60 0.10 0.60 0.20 Equipment depreciation Supervisory expense Other...
Callum Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company has provided the following data to aid in that study: Callum Corporation Tech Support Department Data Inputs Resource Data: Number of employees 10 Average salary per employee $ 44,880 Weeks of employment per year 50 Minutes available per week (40 hours × 60 minutes) 2,400 Practical capacity percentage 85 % Activity Data: Routing Calls Resolving Problems Preparing Change Orders Minutes per unit of the...
ScholfieldEnterprises makes a variety of products that it sells to other businesses. The company’s activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: Activity Cost Pool Activity Measure Activity Rate Supporting assembly Direct labor-hours (DLHs) $ 6.55 per DLH Processing batches Number of batches $ 138.20 per batch Processing orders Number of orders $ 52.60 per order Serving customers Number of customers $ 1,191.00 per customer...
Garner Industries manufactures precision tools. The firm uses an activity-based costing system. CEO Deb Garner is very proud of the accuracy of the system in determining product costs. She noticed that since the installment of the ABC system 10 years earlier, the firm had become much more competitive in all aspects of the business and earned an increasing amount of profits every year. In the last two years, the firm sold 0.550 million units to 4,300 customers each year. The...
Garner Industries manufactures precision tools. The firm uses an activity-based costing system. CEO Deb Garner is very proud of the accuracy of the system in determining product costs. She noticed that since the installment of the ABC system 10 years earlier, the firm had become much more competitive in all aspects of the business and earned an increasing amount of profits every year. In the last two years, the firm sold 1 million units to 4,100 customers each year. The...
Foam Products, Inc., makes foam seat cushions for the automotive and aerospace industries. The company's activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labor Batch processing Order processing Customer service Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers $ $ $ $ Activity Rate 14 per direct labor-hour 89 per batch 276 per order 2,610 per...