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An ice cream manufacturer, Cool Cream Inc., produces three types of ice creams, Vanilla, Chocolate Chip, and Pineapple Ginger sorbet. The ice cream is sold

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An ice cream manufacturer, Cool Cream Inc., produces three types of ice creams, Vanilla, Chocolate Chip, and Pineapple Ginger sorbet. The ice cream is sold in quart size boxes. Direct Material and Direct Labor costs for a quart size box of these three products is given below: Vanilla 1.0 $0.12 Chocolate Chip Pineapple Ginger DM/Quart 1.5 0.067 2.0 $0.2 DL/Quart The Company used to have a simple product costing system that used a single plant wide rate based or machine hours (MH). The manufacturing overhead (MOH) for the company's production facility is $100,000. Required a. Using a single plant wide overhead rate compute unit product costs for a box with one quart of ice cream for each of the three types of ice cream. The company has recently implemented a more refined product costing system know as Activity Based Costing (ABC) system that identifies and measures cost of activities within the production process and then allocates them to products based on cost drivers related to each activity. The company has determined that the four main activities that affect MOH are (1) Machine related, (2) Maintenance, (3) Inventory management, (4) Other (e.g. rent, janitorial costs etc.) Data about these activities is given below: Machine Related Maintenance Inventory Management Other Percent of Total MOH 30% 20% 3096 20% Required b. Compute the 1s stage allocation of MOH to activity cost pools. It is also determined that appropriate cost drivers and related total units for each of the activities identified above are as follows: Activi Machine Related Maintenance Inventory Management Other Cost Drivers Machine Hours (MH) Maintenance hours Number of ingredients Number of quart boxes Total units of the cost driver 100,000MH 2000 maintenance hours 20 ingredients 1,000,000 boxes

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