Fancy Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system has two direct$-$cost categories $($materials and labor$)$ and one indirect$-$cost

pool. The simple costing system allocates indirect costs on the basis of machine$-$hours. Recently, the owners of Fancy Doors have been concerned about a decline in the market share

for their interior doors, usually their biggest seller. Information related to Fancy Doors production for the most recent year follows:

$($Click the icon to view the production data.$)$

$($Click the icon to view additional information.$)$

Read the requirements.

Requirement $1.$ Calculate the cost of an interior door and an exterior door under the existing simple costing system.

Before calculating the cost of an interior and exterior door, begin by calculating the overhead rate under the simple costing system. First select the formula, then enter the applicable

amounts and calculate the rate. $($Round your answer to the nearest cent. Abbreviations used: bgt$.=$ budgeted, qty $=$ quantity.$)$

Budgeted overhead rate

$$

$[$

Simple costing system

$$

Data table

More info

The owners have heard of other companies in the industry that are now using

an activity$-$based costing system and are curious how an ABC system would affect their

product costing decisions. After analyzing the indirect$-$cost pool for Fancy Doors, the owners

identify six activities as generating indirect costs: production scheduling, material handling,

machine setup, assembly, inspection, and marketing. Fancy Doors collected the following

data related to the indirect$-$cost activities:

Marketing costs were determined to be $2\%$ of the sales revenue for each type of door.