Chapter 7: Applying

Chapter 7: Applying Excel Data Manufacturing overhead $500,000 Selling and administrative overhead $300,000 

Determine the product margin for the Office Mart orders under a traditional cost system Manufacturing overhead....

Requirement #1a) The customer margin is negative ($6,600).b) The product margin is $1,600.c) The profitability picture looks so much different now because they increased the order volume and not the number of units. ABC costing system heavily relies on the amount of units and not customer orders. Whereas, the Traditional Costing System has a profit because it relies more on the quantity of orders. So in this scenario, the number of customer orders increases.