Gary Auto Parts (GAP) has a Seat Assembly Department that uses activity-based costing. GAP's system has the following activities: (Click the icon to view the activities.) Each baby seat has 40 parts. Direct materials cost per seat is $18. Direct labor cost per seat is $9. Suppose an automobile manufacturer has asked GAP for a bid on 10,000 built-in baby seats that would be installed as an option on its SUVS. GAP will use a total of 320 purchase orders if the bid is accepted. Read the requirements. Requirement 1. Compute the total cost GAP will incur to (a) purchase the needed materials and then (b) assemble and (c) package 10,000 baby seats. Also, compute the average cost per seat. (Round the average cost per seat to the nearest cent.) x Data Table Activity costs: Activity Purchasing Assembling Packaging Allocation Base Number of purchase orders Number of parts Total cost of order Cost Allocation Rate $30.00 per purchase order $0.40 per part $7.00 per finished seat Divide by Number of finished seats Average cost per seat Requirement 2. For bidding, GAP adds a 45% markup to total cost. What total price will GAP bid for the entire order? GAP will bid for the entire order. Requirement 3. Suppose that instead of an ABC system, GAP has a traditional product costing system that allocates indirect costs at the rate of $60 per direct labor hour. The baby seat order will require 6,000 direct labor hours. What price will GAP bid this system's total cost assuming a 45% markup to total cost? First, compute the total cost of the order using a traditional product costing system. x Data Table Activity Allocation Base Cost Allocation Rate Total cost of order Purchasing Assembling Number of purchase orders Number of parts Number of finished seats $30.00 per purchase order $0.40 per part $7.00 per finished seat GAP will bid using this system's total cost assuming a 45% markup to total cost. Packaging Requirement 4. Use your answers to Requirements 2 and 3 to explain how ABC can help GAP make a better decision about the bid price. GAP's bid would be $ using the traditional system than using ABC. Assuming the ABC system more accurately captures the costs caused by the order, the traditional system the order. This leads to a bid price and GAP's chance of winning the order. The ABC system can GAP's chance of winning the order by bidding a price