Atlantic Inc. has a small boat assembly plant and has recently started using activity$-$based costing. The company's manufacturing facility has the following activities:

$\backslash$table$[[$Activity$,$Allocation Base,Quantity,$\backslash$table$[[$Budgeted$],[$Overhead Cost$]]],[$Purchasing$,$Number of purchase orders,$1,180,153,400],[$Tooling$,$Number of machine hours,$8,500,212,500],[$Assembling$,$Number of parts,$60,000,300,000],[$Quality$,$Number of inspections,$2,500,175,000],[$Packaging$,$Number of finished boats,$3,000,270,000]]$

A newly established beach resort has asked Atlantic for a bid on $45$ speed boats with turbo engine and a seating capacity of up to $10$ tourists.

The production department has calculated and submitted the following estimates for the manufacturing of $45$ boats speed boats.

Each boat will require direct material of $$1,250$ and some $60$ direct labor hours and $15$ machine hours will be required to complete one boat. As highly specialized and technical staff is required for such jobs, the labor is paid $$16$ per direct labor hours. Furthermore, $50$ different parts would need to be assembled. Procurement department will have to place a total of $70$ purchase orders to complete $45$ boats if the bid is accepted.

Requirements:

Compute the total cost, including primary costs, and all the related overhead and production costs to purchase the needed materials, then assemble, inspect and package $20$ boats. Also, compute the average overhead and overall manufacturing cost per boat.

What total and unit price will Atlantic Inc. bid for the entire order if the company adds $35\%$ profit margin above cost?

Suppose that instead of an ABC system, Atlantic Inc. uses a traditional product costing system that allocates indirect costs at the rate of $$17\mathrm{.}5$ per direct labor hour. What price will Atlantic Inc. bid using traditional cost allocation basis, assuming a $35\%$ profit margin on total production cost?

If instead the overhead cost is allocated @ $$62\mathrm{.}5$ per machine hour, then what would be the total and per unit cost and bid price assuming a $35\%$ profit margin?

Use your answers to Requirements $2,3$ and $4$ to explain how ABC can help Atlantic Inc. make a better decision about the total bid price of the order by showing cost and percentage analysis for the allocated costs.