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Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Cost Pool Supporting manufacturing Order processing Customer service Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Number of cases Number of orders Direct labour-hours per case Selling price per case Direct materials cost per case Activity Rates $2 per direct labour-hour $21 per order $62 per customer les sts: Direct materials Direct labour upporting manufacturing rder processing ustomer service unmar mornin Standard Model 210 5 0.25 41 18 $ $ Deluxe Model 65 2 0.40 61 21 e company's direct labour rate is $22 per hour. quired: ing the company's ABC system, compute the customer margin of Cell City. $ $

Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Cost Pool Supporting manufacturing Order processing Customer service Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Number of cases Number of orders Direct labour-hours per case Selling price per case Direct materials cost per case Activity Rates $2 per direct labour-hour $21 per order $62 per customer les sts: Direct materials Direct labour upporting manufacturing rder processing ustomer service unmar mornin Standard Model 210 5 0.25 41 18 $ $ Deluxe Model 65 2 0.40 61 21 e company's direct labour rate is $22 per hour. quired: ing the company's ABC system, compute the customer margin of Cell City. $ $

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 22E: Silven Company has identified the following overhead activities, costs, and activity drivers for the...
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Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Cost Pool Supporting manufacturing Order processing Customer service Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Number of cases Number of orders Direct labour-hours per case Selling price per case Direct materials cost per case Sales Costs: Activity Rates $2 per direct labour-hour $21 per order $62 per customer Direct materials Direct labour Supporting manufacturing Order processing Customer service The company's direct labour rate is $22 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer mannin Standard Model 210 5 0.25 $41 $18 Deluxe Model 65 2 0.40 $ 61 $ 21 0 01
Transcribed Image Text:Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model. Management has designed an ABC system with the following activity cost pools and activity rates for these models: Activity Cost Pool Supporting manufacturing Order processing Customer service Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products over the last 12 months: Number of cases Number of orders Direct labour-hours per case Selling price per case Direct materials cost per case Sales Costs: Activity Rates $2 per direct labour-hour $21 per order $62 per customer Direct materials Direct labour Supporting manufacturing Order processing Customer service The company's direct labour rate is $22 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer mannin Standard Model 210 5 0.25 $41 $18 Deluxe Model 65 2 0.40 $ 61 $ 21 0 01
Order processing Customer service. Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products the last 12 months: Number of cases Number of orders. Direct labour-hours per case. Selling price per case Direct materials cost per case. Sales Costs: Direct materials Direct labour $21 per order $62 per customer Supporting manufacturing Order processing Customer service The company's direct labour rate is $22 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer margin Standard Model 210 5 0.25 41 $ $ 18 Deluxe Model 65 2 $ 0.40 $ 61 $ 21 0 0
Transcribed Image Text:Order processing Customer service. Management would like an analysis of the profitability of a particular customer, Cell City, which has ordered the following products the last 12 months: Number of cases Number of orders. Direct labour-hours per case. Selling price per case Direct materials cost per case. Sales Costs: Direct materials Direct labour $21 per order $62 per customer Supporting manufacturing Order processing Customer service The company's direct labour rate is $22 per hour. Required: Using the company's ABC system, compute the customer margin of Cell City. Customer margin Standard Model 210 5 0.25 41 $ $ 18 Deluxe Model 65 2 $ 0.40 $ 61 $ 21 0 0
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