3. Berina Computer Company, which has been in operation for ten years, produces a line of...

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3. Berina Computer Company, which has been in operation for ten years, produces a line of minicomputers. Holstrum, Ltd., placed an order for eighty minicomputers and the orders has just been completed. Berina recently shifted to an ectivity-based system of cost assignment. Sandra Alvarez, the controller, is interested in finding out the impact that the ABC system had on the Holstrum order. Raw materials, purchased parts, and production labor costs fort he Holstrum order are as follows: 220 Cost of raw materials $36,750 Cost of purchased parts $21,300 Production direct labor hours Average direct labor pay rate $15.25 Other operating costs are as follows: 31525 3355 Traditional costing data using single, plantwide overhead rate: Manufacturing overhead costs were assigned at a rate of 270 percent of direct labor dollars. Activity-based costing data: Activities Cost Drivers Electrical engineering design Engineering hours Work cell setup Number of setups Parts production work cell Product testing cell Machine hours Cell hours Cost Pool Rates $19.50 per engineering hour $29.40 per setup $26.30 per machine hour $32.80 per cell hour Activity Usage for Holstrum Order 32 engineering hours 11 setups 134 machine hours 52 cell hours Packaging work cell Cell hours $17.50 per cell hour 22 cell hours Building occupancy-related overhead costs are allocated at a rate of $9.80 per parts production work cell machine hour. Required: 1.Using the traditional costing approach, compute the total cost of the Holstrum order. 2.Using the activity-based costing approach, compute the total cost of the Holstrum order. 3. Berina Computer Company, which has been in operation for ten years, produces a line of minicomputers. Holstrum, Ltd., placed an order for eighty minicomputers and the orders has just been completed. Berina recently shifted to an ectivity-based system of cost assignment. Sandra Alvarez, the controller, is interested in finding out the impact that the ABC system had on the Holstrum order. Raw materials, purchased parts, and production labor costs fort he Holstrum order are as follows: 220 Cost of raw materials $36,750 Cost of purchased parts $21,300 Production direct labor hours Average direct labor pay rate $15.25 Other operating costs are as follows: 31525 3355 Traditional costing data using single, plantwide overhead rate: Manufacturing overhead costs were assigned at a rate of 270 percent of direct labor dollars. Activity-based costing data: Activities Cost Drivers Electrical engineering design Engineering hours Work cell setup Number of setups Parts production work cell Product testing cell Machine hours Cell hours Cost Pool Rates $19.50 per engineering hour $29.40 per setup $26.30 per machine hour $32.80 per cell hour Activity Usage for Holstrum Order 32 engineering hours 11 setups 134 machine hours 52 cell hours Packaging work cell Cell hours $17.50 per cell hour 22 cell hours Building occupancy-related overhead costs are allocated at a rate of $9.80 per parts production work cell machine hour. Required: 1.Using the traditional costing approach, compute the total cost of the Holstrum order. 2.Using the activity-based costing approach, compute the total cost of the Holstrum order.