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Cost Allocation and Responsibi Problems Group A Learning 29-27A Comparing costs from ABC and single-rate systems Crescent Pharmaceuticals manufactures an over-the-counter allergy medication. The company

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Cost Allocation and Responsibi Problems Group A Learning 29-27A Comparing costs from ABC and single-rate systems Crescent Pharmaceuticals manufactures an over-the-counter allergy medication. The company sells both large commercial containers of 1.000 capsules to health care facili- ties and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: 2. travel pac Activity Estimated Indirect Cost $ 96,000 Dm Materials handling OL Packaging mot Quality assurance Total indirect costs Allocation Base Number of kilos Number of machine hours Number of samples Estimated Quantity of Allocation Base 24,000 kilos 4.00 4,140 hours 50.00 2,075 samples 60.00 207,000 $ 427,500 Actual production information includes the following: Commercial Containers 4,000 containers Units produced Travel Packs 54,000 packs 5,400 Weight in kilos Machine hours Number of samples 3,000 unit so Unito 400 810 Requirements 1. Compute the predetermined overhead allocation rate for each activity. 2. Use the predetermined overhead allocation rates to compute the activity-based unit of the commercial containers and the travel packs. Round to two decimal places. (Hint: First compute the tota places. (Hint: First compute the total activity-based costs allocated to each product line, and then compute the cost per unit.) inal single plantwide overhead allocation rate costing system 3. Crescent's original single plantwide overhead alle direct costs to products at $153,00 per machine hour. Compute the srs allocated to the commercial containers and to the travel packs al system. Then compute the indirect cost per unit for each allocated indirect costs to products at $153 total indirect costs allocated to the commer under the original system. Then compute the product. Round to two decimal places. 4. Compare the indirect activity-based from the traditional system. He costs changed. indirect activity-based costs per unit to the indirect costs per unit ional system. How have the unit costs changed? Explain why the

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