ACTG 131 Managerial Accounting Class: Spring 2021 Some updates could not be installed automatically. Homework: CASES Set 2 - Chapter 19 (Required) Save Score: 17.35 of 50 pts 2 of 3 (3 complete) HW Score: 50.44%, 50.44 of 100 pts : , *P4-37A (similar to) Question Help Corbertt Company develops software for internet applications. The market is very competitive, and Corbertt Company's competitors continue to introduce new products at low prices. Corbett Company offers a wide variety of softwarefrom simple programs that enable new users to create personal webpages to complex commercial search engines. Like most software companies Corbertt Company's rew material costs are insignificant. Corbertt Company has just hired Nicole Merrell, a recent university graduate in accounting. Merrell asks Software Department Manager Jeff Gire to join her in a plot activity based costing study. Merrell and Gire identify the following activities, related costs, and cost a location bases: (Click the icon to view the information. Requirements Requirement 1. Compute the cost allocation rate for each activity. Determine the formula, then computer the cost allocation rate for each activity. (Round your answers to the nearest cent.) Activity Estimated indirect activity cost 1 Cosi allocation base estimated) overhead rate Appl. Dev S S 1,500,000 =S 500,000 application Content prod S S 2,800,000 1 14,000,000 - S 0.20 line Testing S 270.000 1 1,500 = $ 180 1 hour Requirement 2. Use the activity based cost allocation rates to compute the indirect cost of each unit of X Page and Secure. (Hint: Compute the total activity costs allocated to each product line and then compute the cost per unit.) (Round the cost per unit to the nearest cent.) X.Page X-Secure $ Applications development Content production Testing Total costs Number of units 500,000 108,000 27,000 635,000 30,000 21.17 $ $ Per unit cost Corbertt Company develops software for internet applications. The market is very co and Corbertt Company's competitors continue to introduce new products at low price Corbertt Company offers a wide variety of softwarefrom simple programs that ena users to create personal webpages to complex commercial search engines. Like mo companies, Corbertt Company's raw material costs are insignificant. Requirement 2. Use the activity based cost allocation rates to compute the indirect and then compute the cost per unit.) (Round the cost per unit to the nearest cent. X-Page X-Secure $ 500,000 Applications development Content production 108,000 Testing 27,000 Total costs $ 635,000 30,000 Number of units $ 21.17 Per unit cost Requirement 3. Jacobson Company's original single-allocation-base costing system allocated indirect costs to products at $121 per programmer hour. X-Page requires 14,000 programmer hours, while X-Secure requires 21,000 programmer hours. Compute the total indirect costs allocated to X-Page and X-Secure under the original system. Then, compute the indirect cost per unit for each product. First, compute the total indirect costs allocated to X-Page and X-Secure under the original single-allocation-base system. Select the formula, then enter the amounts and calculate the indirect cost allocated. Indirect cost Product X allocated X X-Page X-Secure Requirement 4. Compare the activity-based costs per unit to the costs from the simpler original system. How have the unit costs changed? Explain why the costs changed as they did. The original system X-Page and VX-Secure. times as much testing as X-Page. The ABC system The original system allocated overhead to X-Secure than to X-Page. But X-Secure required times as many lines of code and this difference and allocates of the content production and testing costs to X-Secure. Requirement 5. What are the clues that Jacobson Company's ABC system is likely to pass the cost-benefit test? Jacobson Company's different software applications use Jacobson Company has costs. Jacobson Company produces Jacobson Company is in Jacobson Company has Indirect Allocation Quantity of Activity Activity Costs Base Allocation Base $ Applications development .. Content production 1,500,000 New applications 3 new applications 2,800,000 Lines of code 14 million lines 270,000 Testing hours 1,500 testing hours 4,570,000 Testing $ Total indirect costs. Corbertt Company is planning to develop the following new applications: X-Pagesoftware for developing personal webpages X-Secure-commercial security and firewall software X-Page requires 540,000 lines code and 150 hours of testing, while X-Secure requires 8.1 million lines of code and 900 hours of testing. Corbertt Company expects to produce and sell 30,000 units of X-Page and 19 units of X-Secure