Fancy Doors, Inc., produces two types of doors, interior and exterior. The companys 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:

	Interior	Exterior
Units sold	3,200	1,800
Selling price	$250	$400
Direct material cost per unit	$60	$90
Direct manufacturing labor cost per hour	$32	$32
Direct manufacturing labor-hours per unit	1.50	2.25
Production runs	40	85
Material moves	72	168
Machine setups	45	155
Machine-hours	5,500	4,500
Number of inspections	250	150
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:
Activity	Activity Cost	Activity Cost Driver
Production scheduling	$190,000	Production runs
Material handling	$90,000	Material moves
Machine setup	$50,000	Machine setups
Assembly	$120,000	Machine-hours
Inspection	$16,000	Number of inspections
Marketing costs were determined to be 3% of the sales revenue for each type of door.
REQUIREMENTS:
Use cell references and formulas where possible in order to receive full credit.
1. Calculate the cost of an interior door and an exterior door under the existing simple costing system.
Calculate the overhead rate under the simple costing system. Then calculate the cost of an interior door and an exterior door. Finally calculate the cost per unit for each product.
2. Calculate the cost of an interior door and an exterior door under an activity-based costing system.
Calculate the activity-based costing system allocation rates for each activity. Then calculate the cost of an interior door and an exterior door. Finally calculate the cost per unit for each product.
SAVE & SUBMIT:
After entering your answer in the second tab (ENTER SOLUTION HERE), save your spreadsheet by clicking FILE > SAVE AS. Make sure you DO NOT included spaces in your file name, and remember to save the file somewhere you will be able to find it, such as the Desktop.