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1 сарег Т.Аррупу Excel 2 3 Data 4 $ Manufacturing overhead Selling and administrative overhead 500,000...

1 сарег Т.Аррупу Excel 2 3 Data 4 $ Manufacturing overhead Selling and administrative overhead 500,000 300,000 5 $ 6 7 Other(a) What is the customer margin under activity-based costing when the number of orders increases to 23? (Enter a loss as a ne(c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question

1 сарег Т.Аррупу Excel 2 3 Data 4 $ Manufacturing overhead Selling and administrative overhead 500,000 300,000 5 $ 6 7 Other Assembling Units 50% Processing Orders 35% Supporting Customers 5% 10% 10% 45% 25% 20% 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 11 250 100 1,000 units orders customers 12 13 OfficeMart orders: 14 Customers 1 customer 23 orders 80 units 15 Orders 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor $ 595 $ 180 $ 50
(a) What is the customer margin under activity-based costing when the number of orders increases to 23? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) What is the product margin under the traditional costing system when the number of orders increases to 23? (Enter a loss as a negative amount.) Product margin under the traditional costing system
(c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will decrease. ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease. ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected. ? If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected.
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a). Activity-based costing

Cost allocation:

Accounting units Processing units Supporting customers Other Total
Manufacturing 250000 175000 25000 50000 500000
S&A 30000 135000 75000 60000 300000
Total 280000 310000 100000 110000 800000

Activity rates

Assembling units = 280000 / 1,000 units = $280 per unit
Processing orders = 310000 / 250 orders = $1240 per order
Supporting customers = 100000/ 100 customers = $1000 per customer

Sales(80 x 595) 47600
Costs: Direct material(80 x 180) 14400
Direct Labor(80 x 50) 4000
Assembling units(80 x 280) 22400
Processing units(23x 1240 per) 28520
Supporting documents(1 x 1000) 1000
Activity-based consumer margin (22720)

b) Traditional based

Manufacturing Overhead per unit = 500000 / 1000 orders = 500 per unit

Sales(80 x 595) 47600
Costs: Direct material(80 x 180) 14400
Direct Labor(80 x 50) 4000
Manufacturing overheads(80 x 500) 40000
Activity-based consumer margin (10800)

c) 1st and 4th are true

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