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(a) What is the customer margin under activity-based costing when the number of orders increases to 11? (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 11? (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.) check all that apply 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.unanswered 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.unanswered 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.unanswered 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.

(a) What is the customer margin under activity-based costing when the number of orders increases to 11? (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 11? (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.) check all that apply 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.unanswered 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.unanswered 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.unanswered 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.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 10MC: Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the...
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(a) What is the customer margin under activity-based costing when the number of orders increases to 11? (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 11? (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.)

check all that apply

  • 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.unanswered
  • 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.unanswered
  • 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.unanswered
  • 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.
2. Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 11. (Prior to completing this requirement, change all worksheet figures back to their original amounts.) A В E 1 Chapter 7: Applying Excel 2 3 Data 4 Manufacturing overhead $ 500,000 Selling and administrative overhead 2$ 300,000 Assembling Processing Orders Supporting Customers 7 Other Units 8 Manufacturing overhead 50% 35% 5% 10% Selling and administrative overhead 10% 45% 25% 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 2$ 180 19 Direct labor 2$ 50 %24
Transcribed Image Text:2. Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 11. (Prior to completing this requirement, change all worksheet figures back to their original amounts.) A В E 1 Chapter 7: Applying Excel 2 3 Data 4 Manufacturing overhead $ 500,000 Selling and administrative overhead 2$ 300,000 Assembling Processing Orders Supporting Customers 7 Other Units 8 Manufacturing overhead 50% 35% 5% 10% Selling and administrative overhead 10% 45% 25% 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 2$ 180 19 Direct labor 2$ 50 %24
1 Chapter 7: Applying Excel 2 3 Data 4 Manufacturing overhead 5 Selling and administrative overhead $500,000 $300,000 6. Assembling Processing Supporting Units 7 Orders Customers Other 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 50% 35% 5% 10% 10% 1,000 45% 25% 20% 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 19 Direct labor 1 customer 4 orders 160 units $595 $180 $50 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 Units $ 250,000 25 Orders Customers Other Total $ 175,000 $ 500,000 26 Manufacturing overhead 27 Selling and administrative overhead 28 Total cost 30,000 $ 280,000 $ 310,000 ###HHHH# $ 50,000 75.000 $ 100,000 135.000 60,000 300.000 $110,000 $ 800,000 29 30 Compute the activity rates 31 Activity Cost Pools 32 Assembling units 33 Processing orders 34 Supporting customers Total Activity Activity Rate $280 per unit $1,240 per order $1,000 per customer Total Cost $ 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 АВС Cost Activity 160 units 38 Assembling units 39 Processing orders 40 Supporting customers Activity Rate $280 per unit $1,240 per order $1,000 per customer $44,800 $4,960 $1,000 4 orders 1 customer 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 44,800 47 Unit-related overhead 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 $ 95,200 58 Costs: Direct materials 60 Direct labor 59 $ 28,800 8,000 80,000 61 Manufacturing overhead 62 Traditional costing product margin (116,800) $ (21,600) 63
Transcribed Image 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 Units 7 Orders Customers Other 8 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 50% 35% 5% 10% 10% 1,000 45% 25% 20% 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 19 Direct labor 1 customer 4 orders 160 units $595 $180 $50 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 Units $ 250,000 25 Orders Customers Other Total $ 175,000 $ 500,000 26 Manufacturing overhead 27 Selling and administrative overhead 28 Total cost 30,000 $ 280,000 $ 310,000 ###HHHH# $ 50,000 75.000 $ 100,000 135.000 60,000 300.000 $110,000 $ 800,000 29 30 Compute the activity rates 31 Activity Cost Pools 32 Assembling units 33 Processing orders 34 Supporting customers Total Activity Activity Rate $280 per unit $1,240 per order $1,000 per customer Total Cost $ 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 АВС Cost Activity 160 units 38 Assembling units 39 Processing orders 40 Supporting customers Activity Rate $280 per unit $1,240 per order $1,000 per customer $44,800 $4,960 $1,000 4 orders 1 customer 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 44,800 47 Unit-related overhead 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 $ 95,200 58 Costs: Direct materials 60 Direct labor 59 $ 28,800 8,000 80,000 61 Manufacturing overhead 62 Traditional costing product margin (116,800) $ (21,600) 63
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