company produces camping equipment: tents, sleeping bags, and tarps. They are implementing a new accounting software and want to take the opportunity to implement activity based costing for their products. For the upcoming year, they expect to produce and sell 300,000 sleeping bags, 200,000 tents and 150,000 tarps.

Because the employees in HR, Engineering and Facilities are salaried, and because the Building Rent and Machine depreciation are in the Facilities department, the Human Resources, Facilities Maintenance, and Engineering and Quality Departments are considered to be all Fixed Costs. The production departments include costs for hourly workers, spare parts, and utilities, therefore, the Fabrication and Assembly Production Departments are considered to be all Variable Costs.

The departments, costs and other related information are as follows:

	Department	Annual Budget Direct exp		Cost Driver		Headcount	Square feet
	Human Resources Department	$ 300,000.00		Headcount
	Facilities Maintenance Department	$ 1,500,000.00		Square Feet		10
	Engineering and Quality Department	$ 400,000.00		Square Feet		5
	Fabrication Produciton Departement	$ 1,800,000.00		Machine hours		20	40,000
	Assembly Produciton Department	$ 1,200,000.00		Man Labor hours		15	60,000
The hour in production are budgeted as follows:
	Product Line	Fabrication Time		Assembly time
	Sleeping Bags	4,160		Machine hours		49,920	Man labor hours
	Tents	4,160		Machine hours		37,440	Man labor hours
	Tarps	2,080		Machine hours		6,240	Man labor hours
The Raw Material costs and usage is as follows:
	Raw Materials	Cost		Unit
	Nylon	$ 2.50		Square yard
	Carbon Fiber	$ 8.00		per kg
	Polyfill	$ 1.00		per kg
	Raw Material usage	Nylon		Carbon Fiber		Polyfill
	Sleeping Bags	6.0	sq yd	0	kg	1.5	kg
	Tents	10.0	sq yd	2.5	kg	0	kg
	Tarps	8.0	sq yd	0.5	kg	0	kg

Current Sales Prices are $60 each for Sleeping Bags, $120 each for Tents, and $35 each for Tarps.

Your company wants to determine standard costs as well as understand the drivers for their costs. You have been requested to complete the following calculations. Each calculation should show the fixed cost, variable cost and total cost.

Using the step-down method, allocate costs from the support departments to the production departments.

Calculate the Hourly Operating Rate for each production department, and calculate the annual production costs for each product line.

Calculate the Standard Cost per unit for each Product type.

Calculate the Contribution Margin per unit, Standard Gross Profit per unit, Gross Margin Percentage and Total annual gross profit for each Product type.