Q2. (Garrison) Ferris Corporation makes a single product-a fire-resistantcommercial filing cabinet-that it sells to office furniture distributors. Thecompany has a simple ABC system that it uses for internal decision making.The company has two overhead departments whose costs are listed on thefollowings:Manufacturing overhead$500,000300,000Selling and administrative overheadTotal overhead costs . .$800,000The company's ABC system has the following activity cost pools andactivity measures Activity Cost PoolActivity MeasureAssembling unitsNumber of unitsProcessing ordersNumber of ordersNumber of customersSupporting customersOtherNot applicableCosts assigned to the "Other" activity cost pool have no activity measure;they consist of the costs of unused capacity and organization-sustainingcosts neither of which are assigned to orders, customers, or the product.Ferris Corporation distributes the costs of manufacturing overhead and sellingand administrative overhead to the activity cost pools based on employeeinterviews, the results of which are reported below:Distribution of Resource Consumption Across Activity Cost PoolsAssembling ProcessingUnitsSupporting Other TotalOrdersCustomersManufacturing overhead50%35%5%10% 100%Selling and administrative10%45%25%20% 100%overheadTotal activity1,000250100unitsorderscustomersRequired:1. Compute activity rates for the activity cost pools2. OfficeMart is one of Ferris Corporation's customers. Last year, OfficeMartordered filing cabinets four different times. OfficeMart ordered a total of 80filing cabinets during the year. Construct a table showing the overhead costsattributable to OfficeMart.3. The selling price of a filing cabinet is $595. The cost of direct materials is$180 per filing cabinet, and direct labor is $50 per filing cabinet. What is thecustomer margin of OfficeMart?

Variable Costing Variable costs are costs incurred within the total cost that do not include all…

Q2. (Garrison) Ferris Corporation makes a single product-a fire-resistant commercial filing cabinet-that it sells to office furniture distributors. The company has a simple ABC system that it uses for internal decision making. The company has two overhead departments whose costs are listed on the followings: Manufacturing overhead $500,000 300,000 Selling and administrative overhead Total overhead costs $800,000 The company's ABC system has the following activity cost pools and activity measures

Q2. (Garrison) Ferris Corporation makes a single product-a fire-resistant commercial filing cabinet-that it sells to office furniture distributors. The company has a simple ABC system that it uses for internal decision making. The company has two overhead departments whose costs are listed on the followings: Manufacturing overhead $500,000 300,000 Selling and administrative overhead Total overhead costs $800,000 The company's ABC system has the following activity cost pools and activity measures

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

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