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ezto.mheducation com Accounting Web Slice Gallery Sites suggérés 99 Names of A...teric Online AC live NelsonBrain-My Home login.aro Windows H-streaming Personnaliser les liens Gocgle BMO - Bank of...ine Banking Apple Bing Aplia Yahoo > Chapter 5 Quiz for Marks(15%) Makes Two Products And Uses A Kramer Corporation office supplier deeing in a number of different products. It cu ordering and delivery costs to its residential and business customer groups on the basis of order value. However, the company has recently decided to implement actvitybesed costing starting in 20X4 to assign hese costs to customers, Key data for 20X3 are as fo lows: alocates its Volume Volume Activity Baso Residentia Business Activity Sales (order value) Order procossing Generating sales Salcs falaow-up Processing change orders $3,620,000 $2,880,000 $6,600,000 6,300 390 8,040 2,440 $ 986,000 No. of orders 747,000 816,000 65,000 2,060 3,860 392 182 3,590 No. of sales calls No. of fo low-ups No. of change orders 208 8,010 1,336,980 No. of deverias 0600 Tota $3,928,980 Kramer has 2,000 res dential custcmers and 490 business customers. 1. Compute the cost per custcmer for residenial and business customers for 20x3, using the curment system of“st aloc tian-(Do not round intermediate calculations. Round "Cost per customar" to 2 decimal places and the rest to the nearest whole dollar amount. Residential Business Ordering and delivery costs appled Number of customers Cost per customer 2. Assume that the 20x3 data will hold for 20X4. Compute the cost per customer for residential and business customers for 20X4 using the proposed system of cost allocation, in doing so, calculate the overhead allccation rate for each actvity, and use these rates to assign costs to the two customer graups. (Round intermediate calculations and your answers to 2 decimal places) Cost Pool Order processing Getting sales Sales follow-up Processing change orders Rate per order per aales call per folow-up per change ceder per delvery Ordering and deivcry coets appledExplanation / Answer
1) Currently company is allocating its ordering and delivery costs to residential and business customer groups on the basis of order value. The allocation of ordering and delivery costs is shown as follows:-
Total ordering and delivery costs = $3,928,980
Total order value = $6,600,000
Residential customers order value = $3,620,000
Business customers order value = $2,980,000
Cost allocated to Residential customers = $3,928,980*($3,620,000/$6,600,000) = $2,154,986
Cost allocated to Business customers = $3,928,980*($2,980,000/$6,600,000) = $1,773,994
Calculation of cost per customer (Amount in $)
2) Calculation of activity rate (Amount in $)
Allocation of cost to customers (Amount in $)
(Activity rate is rounded off to four decimals in order to calculate an approximate answer)
Particulars Residential Business Ordering and delivery costs applied (A) 2,154,986 1,773,994 Number of customers (B) (given in question) 2,000 490 Cost per customer (A/B) 1,077.49 3,620.40Related Questions
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