| PMA Inc. |
|||||||
| Data | |||||||
| Manufacturing overhead | $500,000 | ||||||
| Selling and administrative overhead |
$300,000 | ||||||
| Assembling Units | Processing Orders | Supporting Customers | Other | ||||
| Manufacturing overhead | 50% | 35% | 5% | 10% | |||
| Selling and administrative overhead |
10% | 45% | 25% | 20% | |||
| Total activity | 1,000 | 250 | 100 | ||||
| units | orders | customers | |||||
| PMA orders: | |||||||
| Customers | 1 | customer | |||||
| Orders | 4 | orders | |||||
| Number of alternators ordered in total |
80 | units | |||||
| Selling price | $595 | ||||||
| Direct materials | $180 | ||||||
| Direct labor | $50 | ||||||
| Enter a formula into each of the cells marked with a ? below |
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| Review Problem: Activity-Based Costing |
|||||||
| Perform the first stage allocations |
|||||||
| Assembling Units | Processing Orders | Supporting Customers | Other | Total | |||
| Manufacturing overhead | $ 250,000 | $ 175,000 | $ 25,000 | $ 50,000 | $ 500,000 | ||
| Selling and administrative overhead |
30,000 | 135,000 | 75,000 | 60,000 | 300,000 | ||
| Total cost | $ 280,000 |
$ 310,000 |
$ 100,000 |
$ 110,000 | $ 800,000 |
||
| Compute the activity rates | |||||||
| Activity Cost Pools | Total Cost | Total Activity | Activity Rate | ||||
| Assembling units | ? | ? | units | ? | per unit | ||
| Processing orders | ? | ? | orders | ? | per order | ||
| Supporting customers | ? | ? | customers | ? | per customer | ||
| Compute the overhead cost attributable to the OfficeMart orders |
|||||||
| Activity Cost Pools | Activity Rate | Activity | ABC Cost | ||||
| Assembling units | ? | per unit | ? | units | ? | ||
| Processing orders | ? | per order | ? | orders | ? | ||
| Supporting customers | ? | per customer | ? | customer | ? | ||
| Determine the customer margin for the OfficeMart orders under Activity-Based Costing |
|||||||
| Sales | ? | ||||||
| Costs: | |||||||
| Direct materials | ? | ||||||
| Direct labor | ? | ||||||
| Unit-related overhead | ? | ||||||
| Order-related overhead | ? | ||||||
| Customer-related overhead | ? | ? | |||||
| Customer margin | ? | ||||||
| Determine the product margin for the OfficeMart orders under a traditional cost system |
|||||||
| Manufacturing overhead | ? | ||||||
| Total activity | ? | units | |||||
| Manufacturing overhead per unit |
? | per unit | |||||
| Sales | ? | ||||||
| Costs: | |||||||
| Direct materials | ? | ||||||
| Direct labor | ? | ||||||
| Manufacturing overhead | ? | ? | |||||
| Traditional costing product margin |
? | ||||||
ScholarMatic: Explanation & Answer
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