Obj. 5 BE 4-4 Activity-based costing: selling and administrative expenses Jungle
ID: 2341852 • Letter: O
Question
Obj. 5 BE 4-4 Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and sells outdoor play equipment. Jungle Junior uses activity-based costing to determine the cost of the sales order processing and the customer return activity. The sales order processing activity has an activity rate of $20 per sales order and the customer return activity has an activity rate of $100 per return. Jungle Junior sold 2,500o swing sets, which consisted of 750 orders and 80 returns. Determine (A) the total and (B) the per-unit sales order processing and customer return activity cost for swing sets.Explanation / Answer
A.
Total Cost = 20*750 + 100*80 = 15000+8000 = $23000
B.
Number of units per sales order = 2500/750 = 3.33 units
Per order processing cost = 15000/(750*3.33) = $6 per unit
Return Per Unit Cost = 8000/(80*3.33) = $30 per unit
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