Cancico Communications has supplied the following data for use in its ABC system

Question

Cancico Communications has supplied the following data for use in its ABC system: Overhead Costs Wages and salaries Other overhead costs $262,500 150,000 Total overhead costs $412,500 Activity Cost Pool Activity Measure Total Activity 7,500 DLHs Direct labour support Order processing Customer support Other Number of direct labour-hours Number of orders Number of customers These costs are not allocated 600 orders 120 customers to products or customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour Order Customer Wages and salaries Other overhead costs SupportProcessing Support Other 10% 20% 15% 40% 25% 30% 25% Total 100% 100% 35% During the year, Cancico Communications completed an order for special telephone equipment for a new customer, HurnTel. This customer did not order any other products during the year. Data concerning that order follow: $220 per unit 115 units Selling price Units ordered Direct materials Direct labour-hours Direct labour rate $195 per unit 0.6 DLH per unit S 22 per DLH Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.

Explanation / Answer

Answer to part 1

Answer to part 2

Answer to part 3

  Answer to part 4

Direct Labour Support Order Processing Customer Support Other Totals Wages and Salaries $52,500 $105,000 $78,750 $26,250 $262,500 Other overhead costs $22,500 $37,500 $37,500 $52,500 $150,000 Total cost $75,000 $142,500 $116,250 $78,750 $412,500

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