Sundlow Technology uses a traditional costing system, but is considering implementing an activity based cost system. Below is some cost information and a recent order:
Manufacturing overhead $
Selling and administrative overhead $
Assembling Units Processing Orders Supporting Customers Other
Manufacturing overhead
Selling and administrative overhead
Total activity units orders customers
Sundlow Technology orders:
Customers
Orders
Number of filing cabinets ordered in total units
Selling price $
Direct materials $
Direct labor $
Required:
Perform the first stage allocations.
Determine the predetermined Overhead rate for Sundlow Technology orders under a traditional cost system with units as the cost driver.
Determine the product margin for the Sundlow Technology orders under a traditional cost system.
Compute the activity rates.
Compute the overhead cost attributable to the Sundlow Technology orders.
Determine the customer margin for the Sundlow Technology orders under ActivityBased Costing.
