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Determine costs using Activity Based Costing System Green Vision manufactures a line of Virtual Reality Headsets and management has identified the following overhead costs and

Determine costs using Activity Based Costing System
Green Vision manufactures a line of Virtual Reality Headsets and management has identified the following overhead costs and related cost drivers for the coming year:
Overhead item
Expected Cost
Cost Driver
Quantity
Setup costs
$42,000
Number of setups
80
Ordering costs
$12,000
Number of orders
1,200
Machine costs
$52,000
Machine hours
45,000
Power
$11,000
Kilowatt hours
125,000
Gold Silver
Total Direct Materials $2,500 $1,850
Total Direct Labour $1,200 $1,200
Units completed 650650
Number of setups 1012
Number of orders 150150
Machine hours 2,0002,000
Kilowatt hours 8,5009,000
Required:
Design a spreadsheet to determine the cost of each product using an activity-based costing system. worksheet include a data section and clearly show the total costs for each product.
Additional copies of original spreadsheet to complete the following 'What-if-Analysis':
Green Vision is trying to reduce its unit costs. Management believes that the two easiest areas to do this is in setup and power. Calculate the new cost information for each of the following unrelated situations.
[a] What are the new unit costs of each product if annual setup costs are reduced by 25%?
[b] What is the new unit cost of each product if the number of setups for each product can be halved?
[c] What is the new unit cost of each product if annual power costs are reduced by 70%?
In a separate worksheet, show summary of the unit costs from both Part 1 and Part 2 for analysis.
3. Make another copy of original worksheet. In this worksheet will be extending the data and the answer section to include a third VR Headset line called Green, using the following information.
Bronze
Total Direct Materials $2,250
Total Direct Labour $1,100
Units completed 600
Number of setups 5
Number of orders 70
Machine hours 2500
Kilowatt hours 2000
Calculate the total and unit cost for the new Headset line.

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