38 ABC costs, uncertainties about activities, ABM, non-value-added activities The Pond K t Com identhy , 04 pany manufactures kits for fish ponds. The managers recently set up an ABC system to and reduce non-value-added activities. The ABC system includes the following cost po0 drivers, and estimated costs for manufacturing activities: Activity Cost Allocation Rate $ 1.00 per part 40.00 per hour Material handling Forming Molding setup Packing and shipping Inspection Direct labor Direct materials Cost Driver Number of parts Molding hours Number of batches Weight Finished kits Finished kits Finished kits 50.00 per batch 1.30 per pound 10.00 per kit 20.00 per kit 100.00 per kit The company manufactures 10 kits per batch. Each kit requires 20 parts and two hours in mold- ing, and weighs 30 pounds. A. Calculate the total ABC manufacturing cost per batch. B. Calculate the total ABC cost per finished kit. C. Suppose that Pond Kit's managers also want to allocate marketing costs and customer D: service to each product. Total marketing costs for the period were $15,000, and customer service costs were $25,000. Number of batches produced was 1,000. Calculate the total ABC cost per unit and cost per kit, including the costs of marketing and customer services. Pond Kit Com- O D. Are the activities listed likely to be the only possible set of activities for pany? Why or why not? E. Describe how the managers and accountants of Pond Kit Company might use this new ABC system to identify non-value-added activities