Hammond Auto Parts (HAP) has a Seat Assembly Department that uses activity-based costing HAP's system has the following activities: (Click the icon to view the activities.) Each baby seat has 45 parts. Direct materials cost per seat is $16. Direct labor cost per seat is $9. Suppose an automobile manufacturer has asked HAP for a bid on 10,000 built-in baby seats that would be installed as an option on its SUVS. HAP will use a total of 350 purchase orders if the bid is accepted. Read the requirements Requirement 1. Compute the total cost HAP 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) Activity costs Total cost of order Divide by Average cost per seat Requirement 2. For bidding, HAP adds a 45% markup to total cost. What total price will HAP bid for the entire order? HAP will bid $ for the entire order. Requirement 3. Suppose that instead of an ABC system, HAP has a traditional product costing system that allocates indirect costs at the rate of $40 per direct labor hour. The baby seat order will require 8.000 direct labor hours. What price will HAP bid using 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 Hammond Auto Parts (HAP) has a Seat Assembly Department that uses activity-based costing. HAP's system has the following activities: (Click the icon to view the activities.) Each baby seat has 45 parts. Direct materials cost per seat is $16. Direct labor cost per seat is $9. Suppose an automobile manufacturer has asked HAP for a bid on 10,000 built-in baby seats that would be installed as an option on its SUVS HAP will use a total of 350 purchase orders if the bid is accepted. Read the requirements Requirement 2. For bidding. HAP adds a 45% markup to total cost. What total price will HAP bid for the entire order? HAP will bid $ for the entire order. Requirement 3. Suppose that instead of an ABC system, HAP has a traditional product costing system that allocates indirect costs at the rate of $40 per direct labor hour. The baby seat order will require 8,000 direct labor hours. What price will HAP bid using 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 Total cost of order HAP will bid $ using this system's total cost assuming a 45% markup to total cost Requirement 4. Use your answers to Requirements 2 and 3 to explain how ABC can help HAP make a better decision about the bid price. HAP'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 chance of winning the order by bidding a HAP's chance of winning the order. The ABC system can price HAP'S Data table - Activity Allocation Base Cost Allocation Rate sts Purchasing Number of purchase orders $ 30.00 per purchase order Assembling Number of parts $ 0.30 per part Packaging Number of finished seats $ 5.00 per finished seat Print Done ADC bele UAD make a better decision about the hi