A company uses activity-based costing to allocate overhead. The activity cost pools are as follows: Total Estimated Acti

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A Company Uses Activity Based Costing To Allocate Overhead The Activity Cost Pools Are As Follows Total Estimated Acti 1 (86.81 KiB) Viewed 9 times

A company uses activity-based costing to allocate overhead. The activity cost pools are as follows: Total Estimated Activity General factory Machine setups Special processing Customer support Expected Activity 14,000 direct labour hour 800 setups 4,000 machine hours 50 customers Overhead Cost $ 9,800 28,600 196,000 3,500 Each unit requires $425 in direct material and 15 direct labour hours. The direct labour rate is $23 per hour. The selling price is $1,700 per unit. A customer has placed an order for five units that will require a total of two setups and 41 machine hours. Required: 1. Calculate the activity rates (round to two decimal places). (4 marks) 2. Calculate the product margin on the customer order. (8 marks) 3. Calculate the customer margin. (2 marks)