Purchase Solution

First stage allocation of overhead costs for Advanced Products

Not what you're looking for?

Ask Custom Question

Advanced Products Corporation has supplied the following data from its activity-based costing system:
Overheard Cost
Wages and salaries................................$300,000
Other overhead costs.............................100,000
Total overhead costs............................$400,000
Activity Cost Pool Activity Measure Total Activity for the Year
Supporting direct labor...Numbers of direct labor-hours 20,000 DLHs
Order processing......................Number of customer orders 400 orders
Customer support.................. Number of customers 200 customers
Other.............................................. This is an organization sustain activity Not applicable

Distribution of Resources Consumption across Activities
Supporting Order Customer
Direct Labor processing Other Total
Wages and salaries 40% 30% 20% 10% 100%
Other overhead costs 30% 10% 20% 40% 100%
During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order follow:
Data concerning the Shenzhen Enterprises Order
Units order........................................... 10 units
Direct labor-hours............................... 2 DLHs per unit
Selling price........................................... $300 per unit
Direct materials.................................. $180 per unit
Direct labor......................................... $50 per unit

1 Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
2 Compute the activity rates for the activity cost pools.
3 Prepare a report showing the overhead costs for the order from Shenzhen Enterprises including customer support costs.
4 Prepare a report showing the customer margin for Shenzhen Enterprises.

Purchase this Solution

Solution Summary

The first stage allocation of overhead costs for advanced products are examined.

Purchase this Solution


Free BrainMass Quizzes
Introduction to Finance

This quiz test introductory finance topics.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)