Comprehensive Activity-Based Costing Exercise
Silicon Optics has supplied the following data for use in its activity-based costing system:
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:
Required:
1. Using Exhibit 7-5 as a guide, prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.
2. Using Exhibit 7-6 as a guide. compute the activity rate, for the activity cost pools.
3. Prepare a report showing the overhead costs for the order from Indus Telecom, including customer support costs.
4. Using Exhibit 7- 11 as a guide, prepare a report showing the customer margin for Indus Telecom.