activity based costing 461522

Silicon Optics has supplied the following data for use in its activity-based costing system:

Activity Cost Pool Activity Measure Total Activity

Direct labour support Number of direct labour hours 10,000 DLHs

Order processing Number of orders 500 orders

Customer support Number of customers 100 customers

Other These costs are not allocated to products or customers Not applicable

Distribution of Resource Consumption Across Activity Cost Pools

Direct Labour Support Order Processing Customer Support Other Total

Wages and salaries 30% 35% 25% 10% 100%`

Other overhead costs 25% 15% 20% 40% 100%

During the year, Silicon Optics completed an order for a special optical switch for a new customer, Indus Telecom. This customer did not order any other products during the year. Data concerning that order follow:

Data Concerning the Indus Telecom Order

Selling Price $295 per unit

Units ordered 100 units

Direct materials $264 per unit

Direct labour hours 0.5 DLH per unit

Direct labour rate $25 per DLH

Required 3 :

Prepare a report showing the overhead costs for the order from Indus Telecom, including customer support costs.

Required 4:

Prepare a report showing the customer margin for Indus Telecom.