Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to office furniture distributors. The company has simple ABC system that it use for internal decision making. The company has two overheads departments whose costs are listed below;           Manufacturing Over head                                                                                $ 500,000                Selling & Admin overhead                                                                                $ 300,000       Total overhead Costs                                                                  $ 800,000   The company ABC’s system has the following activity cost pools and activity measures;           Activity Costs Pool                                                                                 Activity Measures              Assembling Units………………………     Number of Units              Processing Order ……………………… Number of Orders              Supporting Customer ………………….              Number of Customers   Others………………………………….        Not applicable    Costs assigned to the “others” activity cost pool have no activity measures; they consist of the costs of unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or customers.    The company distribute the cost of manufacturing overhead and selling admin overhead  to the activity cost pools based on employees interviews, the results of which are reported below:   Distribution of Resource Consumption Across Activity Cost pools   Assembling Units Processing Orders Supporting Customers Others Total Manufacturing Overhead 50% 35% 05% 10% 100% Selling & Admin overhead 10% 45% 25% 20% 100% Total Activity 1000 units 250 orders 100 customers       Required Perform the 1st stage allocation of overhead costs to the activity cost pools. Compute the activity rates for the activity costs pools. Office mart is one of ferris corporation’s customer, last year office mart ordered filling cabinets four different times , office mart ordered a total of 100 filing cabinets during the years, overhead cost of these, 100 units and five orders.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
100%

Question, 

Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to office furniture distributors. The company has simple ABC system that it use for internal decision making. The company has two overheads departments whose costs are listed below;

 

        Manufacturing Over head                                                                                $ 500,000

               Selling & Admin overhead                                                                                $ 300,000

      Total overhead Costs                                                                  $ 800,000

 

The company ABC’s system has the following activity cost pools and activity measures;

 

        Activity Costs Pool                                                                                 Activity Measures

             Assembling Units………………………     Number of Units

             Processing Order ……………………… Number of Orders

             Supporting Customer ………………….              Number of Customers

  Others………………………………….        Not applicable 

 

Costs assigned to the “others” activity cost pool have no activity measures; they consist of the costs of unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or customers. 

 

The company distribute the cost of manufacturing overhead and selling admin overhead  to the activity cost pools based on employees interviews, the results of which are reported below:

 

Distribution of Resource Consumption Across Activity Cost pools

 

Assembling Units

Processing Orders

Supporting Customers

Others

Total

Manufacturing Overhead

50%

35%

05%

10%

100%

Selling & Admin overhead

10%

45%

25%

20%

100%

Total Activity

1000 units

250 orders

100 customers

 

 

 

Required

  1. Perform the 1st stage allocation of overhead costs to the activity cost pools.
  2. Compute the activity rates for the activity costs pools.
  3. Office mart is one of ferris corporation’s customer, last year office mart ordered filling cabinets four different times , office mart ordered a total of 100 filing cabinets during the years, overhead cost of these, 100 units and five orders.
  4. The selling price of a filling cabinet $ 595, the cost of direct materials is $ 180 per filing cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100 filling cabinets ordered by office mart? How profitable is office mart as a customer?

 

Question No.4
Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to
office furniture distributors. The company has simple ABC system that it use for internal decision
making. The company has two overheads departments whose costs are listed below;
Manufacturing Over head
Selling & Admin overhead
Total overhead Costs
$ 500,000
$ 300,000
$ 800,000
The company ABC's system has the following activity cost pools and activity measures;
Activity Costs Pool
Assembling Units.
Processing Order
Supporting Customer
Others..
Activity Measures
Number of Units
Number of Orders
Number of Customers
Not applicable
Costs assigned to the "others" activity cost pool have no activity measures; they consist of the costs of
unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or
customers.
The company distribute the cost of manufacturing overhead and selling admin overhead to the activity
cost pools based on employees interviews, the results of which are reported below:
Distribution of Resource Consumption Across Activity Cost pools
Others
Processing Supporting
Orders
Assembling
Total
Units
Customers
Manufacturing Overhead
Selling & Admin overhead
Total Activity
50%
35%
05%
10%
100%
10%
45%
25%
20%
100%
1000 units
250 orders
100 customers
Required
1. Perform the 1st stage allocation of overhead costs to the activity cost pools.
2. Compute the activity rates for the activity costs pools.
3. Office mart is one of ferris corporation's customer, last year office mart ordered filling cabinets
four different times , office mart ordered a total of 100 filing cabinets during the years,
overhead cost of these, 100 units and five orders.
4. The selling price of a filling cabinet $ 595, the cost of direct materials is $ 180 per filing
cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100
filling cabinets ordered by office mart? How profitable is office mart as a customer?
Transcribed Image Text:Question No.4 Feri Corporation makes a single product. A fire resistant commercial filling cabinet that it sells to office furniture distributors. The company has simple ABC system that it use for internal decision making. The company has two overheads departments whose costs are listed below; Manufacturing Over head Selling & Admin overhead Total overhead Costs $ 500,000 $ 300,000 $ 800,000 The company ABC's system has the following activity cost pools and activity measures; Activity Costs Pool Assembling Units. Processing Order Supporting Customer Others.. Activity Measures Number of Units Number of Orders Number of Customers Not applicable Costs assigned to the "others" activity cost pool have no activity measures; they consist of the costs of unused capacity and organization - sustaining cost- neither of which are assigned to products. Orders or customers. The company distribute the cost of manufacturing overhead and selling admin overhead to the activity cost pools based on employees interviews, the results of which are reported below: Distribution of Resource Consumption Across Activity Cost pools Others Processing Supporting Orders Assembling Total Units Customers Manufacturing Overhead Selling & Admin overhead Total Activity 50% 35% 05% 10% 100% 10% 45% 25% 20% 100% 1000 units 250 orders 100 customers Required 1. Perform the 1st stage allocation of overhead costs to the activity cost pools. 2. Compute the activity rates for the activity costs pools. 3. Office mart is one of ferris corporation's customer, last year office mart ordered filling cabinets four different times , office mart ordered a total of 100 filing cabinets during the years, overhead cost of these, 100 units and five orders. 4. The selling price of a filling cabinet $ 595, the cost of direct materials is $ 180 per filing cabinet, And direct labour is $ 50 per filling cabinet what is the product margin on the 100 filling cabinets ordered by office mart? How profitable is office mart as a customer?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education