Phoenix Company Makes Custom Covers for Air Conditioning Units for Homes

Essay

Phoenix Company makes custom covers for air conditioning units for homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity cost pools: The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
The amount of activity for the year is as follows: Required:
a. Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below: b. Compute the activity rates (i.e., cost per unit of activity) for the Making Awnings and Job Support activity cost pools by filling in the table below: c. Prepare an action analysis report in good form of a job that involves making 50 yards of covers and has direct materials and direct labor cost of $1,500. The sales revenue from this job is $2,500.
For purposes of this action analysis report, direct materials and direct labor should be classified as a Green cost; production overhead as a Red cost; and office expense as a Yellow cost.