2. Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following data from its activity-based costing system: Overhead Costs Staff Salaries Selling and administration overheads Total Overhead Costs $500,000 200,000 $700,000 Activity Cost Pool Product design Order Processing Activity Measure Number of new designs Number of Customer orders Number of Customers Organization sustaining activity Total Activity for the Year 500 new designs 700 orders Customer Support 400 customers Others Not applicable Distribution of Resource Consumption across Activities Product Order Customer Other Total Processing 30% Design Support 20% Staff Salaries 40% 10% 100% Selling and administration 30% 10% 20% 40% 100% overheads During the year Sunshine Company completed three individual orders for a new customer, Tarpaper Inc. Two different designs of surfboards were prepared for and sold to this new customer - Orange Tangerine and Blue Waves. Data concerning the two designs and customer orders are as follows: Selling price Direct materials Direct labor Orange Tangerine $700 per unit $280 per unit $100 per unit Blue Waves $500 per unit $180 per unit $50 per unit Order 1 Order 2 10 units of Orange Tangerine 20 units of Blue Waves Order 3 15 units of Orange Tangerines and 15 units of Blue Waves
2. Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following data from its activity-based costing system: Overhead Costs Staff Salaries Selling and administration overheads Total Overhead Costs $500,000 200,000 $700,000 Activity Cost Pool Product design Order Processing Activity Measure Number of new designs Number of Customer orders Number of Customers Organization sustaining activity Total Activity for the Year 500 new designs 700 orders Customer Support 400 customers Others Not applicable Distribution of Resource Consumption across Activities Product Order Customer Other Total Processing 30% Design Support 20% Staff Salaries 40% 10% 100% Selling and administration 30% 10% 20% 40% 100% overheads During the year Sunshine Company completed three individual orders for a new customer, Tarpaper Inc. Two different designs of surfboards were prepared for and sold to this new customer - Orange Tangerine and Blue Waves. Data concerning the two designs and customer orders are as follows: Selling price Direct materials Direct labor Orange Tangerine $700 per unit $280 per unit $100 per unit Blue Waves $500 per unit $180 per unit $50 per unit Order 1 Order 2 10 units of Orange Tangerine 20 units of Blue Waves Order 3 15 units of Orange Tangerines and 15 units of Blue Waves
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4BE: Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 2 images
Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,