Cancico Communications has supplied the following data for u

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

Cancico Communications has supplied the following data for use in its ABC system Overhead Costs Wages and salaries Other overhead costs $272,500 154,000 Total overhead costs $426,500 Activity Cost Pool Direct labour support Order processing Customer support Other Activity Measure Total Activity 7,760 DLHs Number of direct labour-hours Number of orders Number of customers These costs are not allocated 450 orders 130 customers to products or customers NA Distribution of Resource Consumption across Activity Cost Pools Direct Labour Order SupportProcessing Support 35% 25% Customen Wages and salaries Other overhead costs 20% 15% 30% 25% Other 15% 35% Total 100% 100% 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 Selling price Units ordered Direct materials Direct labour-hours Direct labour rate $226 per unit 135 units $199 per unit 0.6 DLH per unit $ 26 per DLH

Solution

Direct Order Customer other totals labor processing support 1) Support Wages and salaries 54500 95375 81750 40875 272,500 other overhead costs 23100 38500 38500 53900 154,000 Total cost 77600 133875 120250 94775 426,500 2) Activity cost pools Activity rate Direct labour support 10 per DLH order processing 297.5 per order customer support 925 per customer 3) Activity cost pools Activity rate Acivity ABC cost Direct labour support 10 per DLH 81 Dlh\'d 810 order processing 297.5 per order 1 orders 297.5 customer support 925 per customer 1 customers 925 total 2032.5 4) Sales 30510 Costs: Direct materials 26865 Direct labor 2106 Direct labour support 810 order processing 297.5 customer support 925 31003.5 Customer margin -493.5