Context: PicturesRUs, (PRU), specializes in designing and printing photographs on either aluminum plates or photographic paper. Most prints are ordered with personalized poems or inspirational phrases imprinted upon them. Aluminum plates have cork blocks glued to their backs for hanging

on walls. Paper prints are framed with wall-hanging hardware attached.

Sales from both products were robust. FY 2020 revenues were $655,000 with a respectable operating profit of $32.750 or 5% (See

Exhibit 1 below).

Management was duly concerned and confused when they reviewed two recent product line profitability analyses. One, which allocated

overhead based on photographs printed, indicated the Paper/Framing line had a gross margin of only $15,200 or 3.2%, the second which

allocated overhead based on direct labor hours, showed the gross margin for the Paper/Framing line was actually negative at ($10,805).

Shakira, PRU's recently hired controller suggested a third product line analysis be completed using activity-based costing. She argued

only by using activity-based costing would a clear picture of product line gross margin emerge.

Shakira prepared a detailed overhead schedule (Exhibit 2, below) with annual overhead amounts and activity driver quantities

by each major overhead area. Shakira came down with COVID and needs your help to complete her ABC analysis

Exhibit 2 Overhead Department Total Ovh Aluminum Paper/Frame Activity Driver Printer Setup and Material Handling $74400 1.00 0.5 Setup time in hours per print Printer Maintenance $8820 10 50 # of prints between each cleaning Depreciation - Aluminum Plate Printer $3600 1200 N/A # of aluminum plates printed Depreciation - Paper Printer $1900 N/A 3800 # of paper prints printed General Depreciation & Utility Costs $136280 800 2228 Square Feet of printing floor space used by each product type Total Overhead $225000 FY2020 Sales Volumes in # prints 1,200 3,800Round answers to 2 decimal places (Ex. $37.888 = $37.89) Overhead Department Activity Driver Qty Overhead Cost $ per Activity Driver Printer Setup and Material Handling Setup Hours Printer Maintenance Cleanings Depreciation - Aluminum Plate Aluminum Prints Printer Depreciation - Paper Printer Photographic Paper Prints General Depreciation & Utility Costs Square FeetDisregard your activity rate calculations from Pat A above. Assume the activity rates per overhead activity are as listed below. Using these rates, determine the cost per Photographic Paper print for each of the overhead departments below. Enter an answer in each box. Overhead Department Activity Driver Qty Overhead Cost for one Photographic Paper Print for each Overhead activity Printer Setup and Material Handling $25.00 Per setup hour Printer Maintenance $44.00 Per cleaning Depreciation - Aluminum Plate Printer $3.10 Per aluminum print Depreciation - Paper Printer $0.55 Per paper print General Depreciation & Utility Costs $44.00 Per square footExhibit 1 Ovh Allocated Based on # Prints Ovh Allocated Based on Dir Labor Hrs Aluminum Paper/Frame Total Aluminum Paper/Frame Total # prints sold 1,200 3,800 5,000 1,200 3,800 5,000 Revenue $180.000 $475.000 $655.000 $180.000 $475.000 $655.000 Material Cost $49.200 $136.800 $186.000 $49,200 $136.800 $186.000 Direct Labor $21,600 $152.000 $173.600 $21,600 $152.000 $173.600 Mig Overhead $54,000 $171.000 $225.000 $27,995 $197.005 $225.000 Gross Margin $45,200 $15,200 $70,400 $81,205 -$10,805 $70,400 GM % 30.7% 3.2% 10.7% 45.1% -2.3% 10.7%% Sell & Gen'l Exp $37650.00 $37650.00 Operating Profit $32750.00 $32750.00 OP % 5% 5%