9. Granby Auto Parts (GAP) has a Seat Manufacturing Department that uses ABC. GAP's activity cost allocation rates include the following: (Click on the icon to view ABC system data.) Suppose Ford has asked for a bid on 25,000 built-in baby seats that would be installed as an option on some Ford SUVs. Each seat has 19 parts, and the direct materials cost per seat is $16. The job would require 15,000 direct labour hours at a labour wage rate of $15 per hour. In addition, GAP will use a total of 200 machine hours to fabricate some of the parts required for the seats. Requirements Requirement 1. Compute the total cost of producing and packaging 25,000 baby seats. Also compute the average cost per seat. (Round the average cost per seat to the nearest cent.) Direct materials Direct labour Allocated overhead: Machining Assembling Packaging Total cost of order Divide by number of seats Average cost per seat Requirement 2. For bidding, GAP adds a 30% markup to total cost. What price will the company bid for the Ford order? Begin by determining the formula to calculate the price the company will bid for the Ford order. (1) (2) Bid price for the Ford order. Print The company will bid $ Requirement 3. Suppose that instead of an ABC system, GAP has a traditional product costing system that allocates manufacturing overhead at a plantwide overhead rate of $35 per direct labour hour. The baby seat order will require 15,000 direct labour hours. Compute the total cost of producing the baby seats and the average cost per seat. What price will GAP bid using this system's total cost? Begin by computing the total cost of producing the baby seats and the average cost per seat. (Round the average cost per seat to the nearest cent.) Direct materials Direct labour Manufacturing overhead Total cost of order Divide by number of seats Average cost per seat Begin by determining the formula to calculate the price the company will bid for the Ford order using this system's total cost. (3) X (4) Bid price The company will bid $ for the Ford order using this system's total cost. Requirement 4. Use your answers to Requirements 2 and 3 to explain how ABC can help GAP make better decision about the bid price it will offer Ford. GAP's bid would be (5) using the plantwide overhead rate than using ABC. Assuming that the ABC system more accurately captures the costs caused by the order, the traditional plantwide overhead system (6) GAP's chance of winning the bid. The ABC system shows that GAP can (9) its chance of winning the bid by bidding a (10) the order. This leads to a (7) bid price that (8)