6. Wallace Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and he Print following information has been developed to determine if an activity-based costing system would be beneficial (Click the icon to view the information) Read the requirements Requirement 1. Wallace's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $140.00 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product Round to two decimal places Select the formula, and then enter the amounts to compute the indirect cost per unit for each product. (Abbreviation used mig. = manufacturing. Round dollar amounts to two decimal places.) (1) = Indirect cost per unit Commercial containers Travel packs Requirement 2. Compute the predetermined overhead allocation rate for each activity Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Abbreviation used: aty quantity. Round your answers to the nearest whole dollar) Predetermined OH (3) (4) allocation rate Materials handling Packaging Quality assurance Requirement 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs. Round to two decimal places. (Hint: First compute the total activity based costs allocated to each product line, and then compute the cost per unit.) Begin by selecting the formula to alkate overhead (OH) costs (5) (6) J = Allocated mig overhead costs Compute the total activity-based costs allocated to commercial containers, and then compute the cost per unit for commercial containers. Finally, compute the total activity-based costs allocated to travel packs then compute the cost per unit for travel packs (Round the cost per unit to two decimal places.) Commercial containers Travel packs Matenals handling Packaging Quality assurance Total activitu.hased mate Activate Windows Go to Settings to activate Windows Print Requirement 3. Use the predetermined overhead allocation rales lo compule the activily-based costs per unit of the commercial containers and the travel packs. Round to two decimal places. (Hint. First compute the lolal activity-based costs allocale product line, and then compute the cost per unit) Begin by selecting the formula to allocate overhead (OH) costs. (5) (6) Allocated mig, overhead costs Compute the total activity-based costs allocated to commercial containers, and then compute the cost per unit for commercial containers. Finally, compute the total activity-based costs allocated to travel packs then compute the cost per unit for travel packs. (Round the cost per unit ta two decimal places) Commercial containers Travel packs Materials handling Packaging Quality assurance Total activity based costs Number of units II Activity-based cost per unit Requirement 4. Compare the indirect activity based costs per unit to the indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the costs changed. Relative to activity-based costing (ABC), the traditional system (7) the commercial containers and (8) the travel packs Activity-based costing (ABC) recognizes that although commercial containers require (10) machine hours per unit than travel packs, they (11) the The traditional system allocates overhead costs solely on (9) same proportion of material Handling and quality assurance 1: Data Table Activity Materials handling Packaging Estimated Indirect Costs Allocation Base $ 96,000 Number of kilos 210 000 Number of machine hours Estimated Quantity of Allocation Base 24.000 kilos 3.000 hours Quality assurance 114,000 Number of samples 1,900 samples $ 420 CICIO Total Indirect conta Activate Windows Go to Settings to activate Windows Actual production information includes the following Commercial Containers Travel Packs Unita produced 2 800 containers 51 000 backs 1: Data Table Print Activity Materials handling Packaging Estimated Indirect Costs Allocation Base S 96,000 Number of kilos 210,000 Number of machine hours Estimated Quantity of Allocation Base 24,000 kilos 3 DDD hours Quality assurance 114,000 Number of samples 1,900 samples S Total indirect costs 120,000 Actual production intormation includes the following: Commercial Containers 2,800 containers 8.400 Travel Packs 51,000 packs 5,100 Units produced Welght in kilos Machine hours Number of samples 2100 510 280 755 1. 2: Requirements Wallace's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $140.00 per machine hour. Compute the total indirect costs alocated to the commercial containers and to the travel packs under the original system Then compute the indirect cost per unit for each product Round to two decimal places 2. Compute the predetermined overhead allocation rate for each activity 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs, Round to two decimal places (Hint First compute the total activity-based costs allocated to each product line, and then compute the cost per unit) Compare the indirect activity based costs per unit to the indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the costs changed. Number of units (2) O Number of units (3) O Estimated qty of the allocation base Allocated mig. OH cost Actual overhead costs Estimated overhead costs Allocated mfg, OH cost Actual overhead costs Estimated overhead costs Actual overhead costs Actual qty of the allocation base used Estimated overhead costs O Estimated qty of the allocation base (5) O O Estimated qty of the allocation base Predetermined OH allocation rate (4) O Actual overhead costs Actual qty of the allocation base used O Estimated overhead costs Actual overhead costs Actual qty of the allocation base used Estimated overhead costs Activate Windows Go to Settings to activate Windows