(Appendix 6A)Phoenix Company Makes Custom Covers for Air Conditioning Units

question 8

Essay

(Appendix 6A)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.

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Definitions:

Semiannually

Occurring twice a year; every six months.

Zero-coupon Bond

A type of bond that does not pay interest during its life; it is sold at a discount from its face value and the return is realized when the bond matures.

Deep Discount

A situation where a bond or other investment is sold significantly below its par or face value.

Yield To Maturity

The total return expected on a bond if it is held until its maturity date, including all interest payments and capital gains or losses.