PMA
Inc.

Data

\$500,000

\$300,000

Assembling Units
Processing Orders
Supporting Customers
Other

50%
35%
5%
10%

10%
45%
25%
20%

Total activity
1,000
250
100

units
orders
customers

PMA orders:

Customers
1
customer

Orders
4
orders

Number of alternators ordered
in total
80
units

Selling price
\$595

Direct materials
\$180

Direct labor
\$50

Enter
a formula into each of the cells marked with a ? below

Review Problem:
Activity-Based Costing

Perform the first stage
allocations

Assembling Units
Processing Orders
Supporting Customers
Other
Total

\$ 250,000
\$ 175,000
\$ 25,000
\$ 50,000
\$ 500,000

30,000
135,000
75,000
60,000
300,000

Total cost
\$
280,000
\$
310,000
\$
100,000
\$ 110,000
\$
800,000

Compute the activity rates

Activity Cost Pools
Total Cost
Total Activity
Activity Rate

Assembling units
?
?
units
?
per unit

Processing orders
?
?
orders
?
per order

Supporting customers
?
?
customers
?
per customer

Compute
the overhead cost attributable to the OfficeMart orders

Activity Cost Pools
Activity Rate
Activity
ABC Cost

Assembling units
?
per unit
?
units
?

Processing orders
?
per order
?
orders
?

Supporting customers
?
per customer
?
customer
?

Determine the
customer margin for the OfficeMart orders under Activity-Based Costing

Sales

?

Costs:

Direct materials
?

Direct labor
?

?

?

?
?

Customer margin

?

Determine the
product margin for the OfficeMart orders under a traditional cost system

?

Total activity
?
units

unit
?
per unit

Sales

?

Costs:

Direct materials
?

Direct labor
?